Case Study - Valuation of Project Equity

Service: Business Valuation

Background

Engaged by a University to investigate the quantum of its project equity in intellectual property as a result of its participation in research projects undertaken at the University
Funds contributed and resources allocated (such as equipment and personnel research time) count towards project equity
Due to the number of parties involved and the methodology adopted to calculate project equity, a dispute arose between some of the parties as to each party’s stake in project equity and therefore its stake in intellectual property
As a result of the dispute as to each party’s equity stake there was a further dispute as to the quantum of royalties paid

Reconciled funds contributed from each party and the resources allocated
Interviewed personnel including management of companies
Developed more reasonable methodology to calculate project equity however, with only limited records maintained, this was difficult
Were able to determine mis-allocation of funds to other parties that had the effect of falsely increasing their project equity
Pragmatic in our approach by providing scenario and sensitivity analysis to present a range of different outcomes of the University’s stake in project equity
After reconciling the allocation of funds between the parties the University’s stake in project equity was increased

Matter settled by mediation
Able to produce fair and reasonable calculation of each participant’s project equity
Consequently, the University’s stake in project equity was increased and therefore able to receive higher royalties

Partner
Sydney