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What's Intellectual Capital?

What's Intellectual Capital?

How can it save finance, foster innovation and serve society?

Welcome to the first episode of “Toby & Friends” — the virtual campfire for knowledge sharing!

“If you’re the smartest person in the room, you’re in the wrong room” — Confucius

The purpose of this podcast is to share knowledge with friends. No agenda. No sponsors. Just coming up with solutions to the most pressing problems of our Modern Times.

About this Episode

In this Episode we’re discussing the state of Intellectual Property (“IP”) as a tangible asset in the financial world and as individual contributions towards a globally evolving society.

I’m happy to have Andreas Zagos as my guest and hope you’ll enjoy the show

Text Transcript


Toby: [00:00:03] Hi, Andreas. How are you?

Andreas: [00:00:06] Hi, Toby. Fine. Fine. Thanks for having me.

Toby: [00:00:10] Good to see you. Good to see you. So for the listeners, just a quick introduction. How we met. We met at a family office event last year in Zurich, and the topic of the discussion was intellectual property for finance. And I found that super, super interesting. I, as you know, I'm an inventor myself. I have filed 20 patents, but learning, you know, what it means for the financial industry at large, and particularly in those days. Um, I would love to hear a little bit more from you, Andreas, because I found out that, you know a thing or two about, about patents, right?

Andreas: [00:00:52] Yeah, that's true. Yeah. Maybe I can introduce me as well a little bit. So a little bit of my background, but very briefly. So I studied chemical engineering in in Germany, in Stuttgart. And after then I went to the Fraunhofer Society, which is one of the biggest research centers in Europe. And yeah, I stepped in into the innovation business, innovation, development, searching for new products for companies. And if you're discussing about innovation, then of course intellectual property rights is one of the most important topics that you have to look at. And yeah, after a few years there, I decided with my former colleague Oliver to make an own business and therefore we formed Intracom Intracom based in Bonn in Germany, and we provided services and then started as well developing our own software for patent evaluation and yeah, we finalized that method in the year 2013 and after that we started to yeah, to find vendors to partner with different partners. And yeah, so we stepped into many different, yeah. Areas which we never dreamed of before, to be honest.

Toby: [00:02:10] Yeah, I can imagine. So actually I can remember that the Fraunhofer Institute is responsible for the development. So I guess, you know, your history back there has, has probably carried forward the, the algorithms that you now use for your for your patent journey. But actually, my interest is a bit more personal. So many years ago, when one of my investors told me, Toby, I want to see how tangible your business is. This was literally right after I had gotten granted my 10th patent and I thought this is a problem If an investor who just invested in my business doesn't understand about the value of patents in terms of being considered intangibles, and he asks me what is tangible. I mean, everybody can look at numbers and you see where numbers have brought us today. We are literally in the week after took over Credit Suisse. You know, we don't know what happens next. So I would consider these numbers that might have looked great for well over a hundred years to be very intangible to say like that. And so so I'm I'm always wondering why is intellectual property. Considered an intangible and not a tangible asset.

Andreas: [00:03:40] Yeah, yeah, yeah. You're completely right. And this is a really good question. I mean, I remember in my days when they say when they are saying was for something which is completely safe. Oh, he's like a bank. Yeah. Or something like this. Yeah. And nowadays you can see that the bank is a very risky, uh. Yeah. Corporate. Yeah. Very risky action. Yeah. In the market at the end of the day. Well, how why they call it intangible. I mean, intangible. It is because at the end of the day, it's an idea. Yeah. Which is then transformed into a right. Yeah. A right of monopoly that only you are allowed for a certain time, uh, to use this. So this is nothing, let's say, built out of steel or concrete. Yeah. Or it's a building you can see, but it's an idea. But everything started with the idea. Yeah. And with no ideas, we would always do the same things. Yeah. And we will have no progress. So therefore, I think. Yeah, it's a problem. You know, if we are only discussing or if we are distinguishing between tangibles and intangibles, I mean this, this doesn't make sense anymore. And if you go into a bank and you are going for lending, for example, yeah, the best chances you have if you have zero tangibles. Yeah. If you do not have any buildings or something like this. Yeah. But if everything is rented. Yeah. Or leased and if you have big revenues and big profits then you are the best guest of the banks. Yeah. So. Yeah.

Toby: [00:05:25] So, so sorry. You can we, can we mean if I think about it a bit philosophically. Right. I have a seat and I see it eventually turns into a perhaps a tree and the tree bears fruit. Let's take an apple tree for. For the sake of example. Yeah. At the seed stage, the seed already contains from an idea point of view, the entire value of the fruit. Yeah, I mean, sure, the labor has to go in. You know, you have to water it. You need that time. I think time is a critical factor for the tree to grow and eventually to produce fruit. But once it's there, it produces fruit for a period of years. Right. So, I mean, then the question is, is the seed the intangible and the fruit is the tangible or is the tree already the tangible? So, you know, when does an intangible become a tangible. I think that would be very interesting because when I look back to my own story with this particular investor, we already had some revenues and we already had a product that was built on this intellectual property. So, you know, you cannot call it an intangible from that point of view.

Toby: [00:06:34] There is already value attached to it. Now I'm just thinking through all these balance sheets of organizations across the world, and I think, you know, the panel that we've both been on last year at that family office event, YPO had just announced a week earlier, if I remember correctly, it was unlocking IP for finance, 71 trillion USD in value. I mean, when I look at at the implosion or the explosion of a bank with a major bank, it's relatively small compared to 71 trillion. You know, where I'm coming from. So if we could really leverage those intangibles and and consider, you know, these half baked apple trees, let's let's put it this way already of value and and had the ability to to measure them. Then perhaps, you know, certain organizations would not be bankrupt. They would not have problems with liquidity. They would have not problems finding another fundraising round. They wouldn't even have to worry about, you know, giving up equity. They could simply put up their intellectual capital, you know, as a collateral. Yeah.

Andreas: [00:07:50] Yeah, yeah, yeah. You're completely right. Well, I mean, and you know, the example with a seed is a very good example because at the end of the day, a patent or an innovation is like a seed, you know, which is and then growing. And it has the DNA inside. And this is maybe the important thing that investors would like to invest, of course, in a company who not have by accident one patent, for example, but where the DNA is to invent and to have a good employees and a really good research to develop new things and and therefore to be, yeah, able to invest in that company and able to believe as well in the possible upside. Um, but yeah, you mentioned a lot of things. Yeah. So and I had always some ideas I try to, to, yeah. To summarize a little bit. Well when you said yeah. About the huge amount of intangible assets and where does an intangible become a tangible. Well sometimes never. But you can make big business out of it. Yeah. Look at Uber. Does Uber have own cars now? Does Airbnb have own rooms? Hotels? No. So it's their business model? Yeah, the business model. And this is all only based on intangibles. Yeah. It's nothing else. Yeah. What they have and yeah. And therefore at the end of the day it's a huge amount. And of course this is what drives the products. What drives innovation. Yeah. And not Yeah. Building some something out of concrete. Yeah. You can do of course a lot of things but here as well if you do not have innovation for, for example new materials. Yeah. To develop new materials or new energy sources or whatever. So you will have no progress. So and therefore the tangibles will have no value at the end of the day. Yeah. Because if everybody can do it, then what's the, what's the selling proposition. Yeah. Or what's the added value of that thing. What you do. Yeah.

Toby: [00:10:04] I very much mean this now. I have so many ideas so I don't know where to start really. But you know, a lot of people talk about a social credit system. You know, people should be rewarded for the good things they do and and maybe not rewarded for, you know, other things they may not do or they may do whatever.

Andreas: [00:10:26] But who is the judge and who is the judge?

Toby: [00:10:28] Is the judge? Absolutely. I mean, that's all there. At the end of the day. We we have an inner compass. But I feel, you know, this is this is not this is sort of getting lost. We are we are trying to outsource that inner compass to some algorithm in the future. But then the question is, who programmed that one? But that's a different topic altogether for another session. But guess you know what? What would.

Andreas: [00:10:50] No, no. Excuse me. Excuse me. Just keep your question. But this is a very, very important thing, you know, because before I forget it. Yeah. You know, I'm quite old now and I forget things, but this is a very important thing, you know, in we have the so-called copyright. Yeah. So if you read a book, if you write an article or whatever, then this belongs to you. Yeah. It's you have a copyright I think over 90 years or something like this. It's a very long period. So if Chatgpt is producing an article, who owns the copyright of it? Yeah, good question.

Toby: [00:11:28] So let me let me make it more complicated for you. In my entire substack I have one article of which one fourth was written by Chatgpt. Everything else is 100% me okay with some quotes and so on. Which which of course I, you know, I properly assign, but I wondered whether anybody will discover this or whether this article will perform better or worse against others. I find it quite interesting, to be honest. I don't have a I don't have a good answer. I mean, I really don't. But the origin of the question that I had and the link back to, say, a social credit system, there is no there's no intellectual capital. Credit system. You see, if the innovators in society would actually would actually be credited with with the progress that they are offering to society, not in the form of, you know, you apply for a patent, you get a patent, you have a monopoly, like you said earlier, it's linked to you. If you would donate this for for the betterment of the society globally, for example, I'm wondering, does that give you any benefit in any way?

Andreas: [00:12:42] Yeah. No, currently not. Yeah, of course. You know, there is a law in Germany and I think in Austria. So if an inventor who is employed at a company and is inventing something, he can receive a bonus. Yeah. A kind of royalty and but yeah. And the depends of course on the on the status. Yeah. That the current employee has. So therefore there is a kind of Yeah. Of bonus existing but yeah that's all. Yeah. And I think your idea or what you mentioned is having a credit system for innovation. Um, yeah. Is very good. Yeah. You know, to put it very.

Toby: [00:13:23] Bluntly, sorry, but to put it quite bluntly, if I take my dog out and excuse my listeners, but if the dog shits on the street and I'm not cleaning it up, you know, and the camera sees me and says, Hey, this is Toby, you know, we're going to remove five points from him just for the sake of example. But, you know, so I'm going to be discredited in some way. Okay. Fair enough. Yeah. Let's take this for the moment. But then at the same time, if I invent something, you know, that easily purifies the water for, you know, hundreds of millions of people in in emerging countries and rural villages. I there's nothing I'm going to at the end of the day, get for that potentially, you know, in terms of social credit. Right. So so I think, you know, that there needs to be I think, first of all, I think there's an interesting aspect considering creativity and innovation capabilities of a person that intellectual capital. And using that in if ever any such system would would hit the earth. You know, it has it has to play a part because if we don't encourage those those and to me, everybody is an inventor. Everyone you know, I live by the mantra, scratch your own itch and everybody has an itch. I'm disturbed by this, or I would like to have that or everybody has ideas. You know, just imagine if everybody could use these ideas. To me, the ideas, not everybody has the capability to execute them. That's that's a given. Exactly. But everybody has the ability to receive an idea which is unique to their life situation. And no two are quite alike. Right. And with receiving that particular idea, it can definitely benefit others. So by sharing that openly, we should be able to get some benefit out of that. I think you can have a different society.

Andreas: [00:15:27] Yeah. Toby. Excuse me. I'm very, very frankly, I'm completely against any credit system. Yeah, it's clear for me, you know, because, first of all, the problem is, who will be the judge? Yeah. Who will judge what is good and what is bad. And on the other hand, very often the scientists have done a lot of inventions in the name of the good, and the result was something bad. Yeah. And yeah, I think the biggest, um, uh, uh issue is especially in the space of sustainable technologies. Yeah. Where they want to develop something very good and very unique for, for, for the world. But yeah, I don't, I think I don't need to open the topic with rare metals and what they're doing in Africa and electromobility and batteries and all that stuff. So you see there is always something negative. Yeah. Um, as well in science and in innovation or there can be something negative and therefore you cannot credit it. But I'm against punishment. And I mean, if you have kids, then you know that their punishment does not work because they will find a different way. Yeah. To go around, to work around and Yeah. And, and it's not a good method. Yeah. And there may be.

Toby: [00:16:57] Another invention coming right out of that.

Andreas: [00:17:00] Yeah there may be. Yeah. Yeah. And at the end of the day, you know, not everybody is able to make innovation or to be innovative. There are other guys who are very good in processing, so when they have the idea where to go, yeah, they know exactly the way where, how to go from A to B, Yeah. While the inventors do not go, do not know the way how to reach the B they know very well the A but not not the B. Yeah, well, they know.

Toby: [00:17:25] The origin and maybe they have an idea of the destination but the way it's a it's a very long and winding road.

Andreas: [00:17:33] Yes, yes yes it's it's yeah exactly. Yeah.

Toby: [00:17:37] So I mean I get it. Just just on that, on that topic, you know, who is the judge. That's what I meant by inner compass. I mean I had some patents especially linked to the metaverse. I'm not going to go into detail, but I started to write them down. And at some point I literally, you know, I threw the paper away because I realized, you know, even though intellectually as a intellectual capital, as a knowledge, as a perhaps even on the on the monetization side, it would be superbly tempting and interesting, but it would result in a in in a it's like a 0 or 1, you know, you could use it for good, but you could use it also for utter evil. And you know who not only who is the judge, but who has control. That's that's that's another aspect of it. Right? So so I just dropped it and and I think, you know, I would agree on that sense. But just on another another thought is, you know, when you look at inventory, like, you know, if you see houses and property and so on, there's a limit. I mean, the earth is only this big, right? I mean, technically there's a limit to the actual. You know, a number of properties that you can buy if you own the whole earth. But in the case of I'm just asking myself and I know this also can be a bit philosophical in intellectual property, is that truly a limit as to what anybody can invent?

Andreas: [00:19:08] No, I think by definition it is infinite. So you can. Yeah. Develop a lot of things. Yeah. Endless. Yeah. At the end of the day, because it's. Well, one is leading to the next. Yeah. Invention. And very often, you know, the inventions are based on other inventions. Yeah. And so it's going on and on and on and on. But just to mention one thing, you know, the problem that we have currently as a society, from my point of view, is not the the number on inventions that we have. There are too less or whatever. I think we have a huge, tremendous number amount on on inventions globally, but it is how to preserve them, how to conserve them, how to share them as well with emerging countries or third countries like Africa, for example, how to share knowledge. And one of the important examples I'll always give as well in my in my lectures is that from approximately 900 after Christ until 1500 in Europe, there was no knowledge about the screw. You know, the screw. There was no functional screw because the knowledge was completely lost in lost in, in in the Central Europe. Yeah. And the knowledge came over the Arabs and then back from Spain, you know, and came again back to, to middle of Europe and if you're going to museum etcetera and you're watching for Yeah. Screws from that period you will see that they are not working, they have no function. Yeah, that's an incredible.

Toby: [00:20:38] Story. I didn't know that one. Thanks for sharing.

Andreas: [00:20:41] Yeah. And it's it's not by me developed it's developed by the German company world. Yeah. They are the biggest producer of screws. Yeah. Yeah.

Toby: [00:20:50] That's, I mean they are from my area so. Yeah. And, and he has, I mean Mr. Vogt has obviously quite a lot of inventions in his name, But, but, but that's, that's, that's again a different story. But just the fact of sharing, I think there is not enough incentivization. Maybe my term credit score was the wrong word earlier. But what I wanted what I wanted to say is I think there is not enough encouragement, you know, and not and hardly any incentivization other than your own own inner good, you know, to share.

Andreas: [00:21:26] You know. Yeah, yeah, you're right. And, and maybe this is our big chance to know in in our in our century where we live that as well a private inventor can earn some some money, can cash out maybe much more easily than in the past. You know, if you are thinking of of blockchains and and crowdfunding and and new technologies, you know, of, of sharing our licensing patterns. Yeah I can really good imagine that the monetization. Yeah. Will become much more easier as well you know for for private inventors or for small companies because very frankly until now it's the business of the of the big companies. You have the Fortune 500. Yeah. So they're ruling and they are leading the patent business and the patent world. Yeah.

Toby: [00:22:13] So so this is interesting. So if I'm a I suppose I'm a smaller company, 20 to 30 employees. Yeah. And, and they are, how can I say they are encouraging their employees with an incentive, you know, to come up with with good ideas. Now you're right now with blockchain and and the mechanisms behind blockchain, you can very easily document each and every part of the ideation process, right? There are so many great tools out there. I mean, if, if, if the listeners have an interest, I think we are both happy to share. But personally in my own company, we have this process. You know, you have idea ideation, right? And even that process already is not yet a patent or an invention, but even the bits and pieces that lead to this could be well documented. And then it becomes a materialization, you know, where where the where the seed already is. You know, maybe it's not yet a fruit, but it starts to grow, right? And then you commercialize it. This is when you earn your when you start to earn your fruits. But but then we come to the later point that you said with the sharing in the preservation, how can we maximize the value? How can it be even determine the value? And then at the end of the day, how can we preserve and use that particular value? And I think this is this is something that I don't understand in the finance world.

Toby: [00:23:35] Why is this not more? You see, I wrote an article I think three weeks ago about the current state of finance in the world, and this was before Credit Suisse and all happened. And I said, look, you got to look at the Middle East, you have to see the de-dollarization. This is all happening now. I mean, it was weeks ago. Anybody could have seen it coming. But, you know, now it is literally happening. And I said, take a look at gold. I mean, you know, we know what happened to that as well. And I think it's going to continue to happen for for the next 5 or 10 years. But what I do not understand. End is why the value of intellectual property does not play a bigger role in the in the financial world and the investments that are done there. Even if you think about private shareholders, what can they do to consider or are there ways for them, you know, to to invest in stocks or in companies? How can they figure out there is intellectual property, number one? And two, is there a way for them to find out whether that's that's tangible or meaningful? Open answer. Yeah.

Andreas: [00:24:39] Yeah, yeah. Clear. So the of course, I mean, the main, the main problem that, that banks are VCs or whoever has is how to value patents or IPR, intellectual property rights with which method. If the the, the patent is currently not in a product you know, or. Yeah. Is not or in a license agreement, you know where there are no revenues and there is only a few future potential. Yeah. And you know a patent is like an option. Yeah. You have an option that may be in 20 years you will have an upside. But one thing is for sure, after 20 years, you will have a downside because the value will drop to zero. Yeah. Yes. So and this is of course something which they do not like. So they don't like to to make bets on a probably upside, but on a sure downside that the value will be sure 0 in 20 years. Yeah. You know their thinking is of course in bonds are going in corporate bonds for have 20 years term. My. Um, I mean, they know, and they have the feeling that. Due diligence. They are missing a big part, you know, maybe the biggest part out of the due diligence and always saying, no, the bankers and etcetera, they're only looking at the result of the company, which are profits, which are revenues. And then they feel good, etcetera. They have a good feeling. Know the temporary state. Exactly. Yeah. And not temporary, but everything they see now is built on decisions from the past, maybe five years ago or ten years ago, where they had good CEOs, where they had good research, and now they are earning the money.

Andreas: [00:26:31] But what is with the future? Yeah, they have no KPIs, you know, which can show them that that company is in risk. And we had some big defaults. I don't want to mention some names here, but we had some defaults last year, um, of companies. So who never guessed, you know, and, and this is the big thing. But in opposition to that, a patent is a forward looking indicator. So and the patent value especially and it can shows you what will be the future a potential future for a company. Yeah. So if we take, for example Apple I can't tell you what how many revenues or profit will Apple have in ten years. But one thing I can tell you that they will have interesting products and they will have innovations from what I can see from their patent portfolio. And and we have done and we're doing a lot of analysis as well in the corporate bond sector, you know, where we have done our current study. And what we have done is that we analyzed the companies which went into bankruptcy in the years 2012 to 2022, and we have issued corporate bonds in that time. And then we analyzed how many out of them had, um, patents or part. And the point is that if you are chose corporate bonds or then equities, of course, who have part and value. The default rate is significantly lower. How much? Really? 20 times lower than if you do not choose companies with with patent value. With high patent value. Yeah. I mean, this is a very interesting finding. You know.

Toby: [00:28:15] This is incredible. But the question is, if I'm a private investor, how can I know the innovation capability, the forward looking, you know, intellectual capital in an organization which may transform into a into a financial capital for me with returns, Right. How can I know that? How can I figure that out in a stock? Do you mean like, how could I do that?

Andreas: [00:28:42] Yeah. So there are different possibilities. But if you're looking into big sized patent portfolios, like, Yeah, bigger companies, for example, then you can't do this by yeah, manually or looking into patents or asking experts or whatever. So therefore we have developed here a method which is an algorithm. It's based on real transactions. Yeah. From the past and it's trained with real transactions and we have different indicators up to 27 and we are able to analyze any company globally. And we do this every month for over 2 million companies. No, for the public listed, it's 25,000. Yeah. Every month. Okay. And yeah, and here we can determine a value range, you know, and this and this is how this works. And at the end of the day, you can then select better equities, you can enhance your trading models. If you are a hedge fund, you can look into the company and see, okay, is this an interesting one or what is going on with that company for venture capital M&A, for example? And yeah, and only one thing at the end, you know, those companies are really rare going in the default. And why? Because if they are going into default or it seems that they are going somebody is buying them because because of the value of intangible assets. Yes. Yes, exactly.

Toby: [00:30:09] So so so essentially you have a downside protection and you have you maybe you have you cannot completely predict the margin. I mean, but one thing is, sure, you have the leverage. You know, the risk leverage that you have is extremely low. Yes, extremely low. So so let me put it this way. I mean, you know, this is this will be a free podcast, you know, because it's Toby and Friends. So and and obviously, you know, this is this is how it was meant to be. But if our premium members would be interested, you know, to to have some idea about without of course you making an actual recommendation to buy or sell. But if they would just have an interest to know, you know, a few stocks, you know how what is their innovation capability based on those metrics that you have mentioned? If they would be curious to find out and they would email me, would you would you care to take a look?

Andreas: [00:31:10] No, of course we can do this. Yeah, we can do this. And by the way, we have as well an unknown index which is issued by Nasdaq. So it's not our own, but with our methodology, it's a Nasdaq index. A ticker is X and and based on that index is an ETF issued by INVESCO. The ticker is SHS. Yeah. And you can watch as well inside. You see as well the equities which are selected.

Toby: [00:31:39] Okay. Okay. So those equities are particularly are in the healthcare?

Andreas: [00:31:47] Yeah, in the healthcare sector. Yeah. Because you know that is the as well one important message because the number of patents does not correlate with the value. Yeah, of course everybody knows that Apple or Samsung have thousands of patents and they have tremendous value. That's clear for everybody. Yeah, but um, if you have a company which has 50 patents, a small cap, for example, then you can't know it. Yeah. And we have many examples, you know, where we have companies from eastern part of the world, let's say that way, who have 500 or 1000 and they are claiming this on their website and saying, Wow, we are we have a huge patent portfolio.

Speaker3: [00:32:28] But if you look at the value, then it's really small.

Andreas: [00:32:32] And why? Because these are not real patterns, but these are utility models, which is a small pattern. Yeah, it's not proven by the patent office. It's granted you can file whatever you want. So it's, let's say, more or less a marketing tool. Yeah. For for those companies. But investors can't know this. They cannot know this, They can only know this if they look into the value, for example, what we provide. And then. Total assets or to the market cap is so small, it's it's real close to zero.

Toby: [00:33:05] So this you know, this actually reminds me of I don't know the exact statement of of Bruce Lee, but at one point he said something along the lines of, you know, I'm not worried about the person who practice 10,000 different kicks, but who practices one particular kick 10,000 times. Just as an example. So, you know, that's good. Didn't you you may only have one patent, you know, but that could be a killer, you know. So the value is not determined by the number of pens. I get that now. And I think, you know, the here.

Andreas: [00:33:39] Is a good example from the history. Yeah, this is a good example. You know, in in the 20 seconds there was the German company called Puff. Yeah. Maybe you know them there they are building or they have built their sewing machines and they had the idea or the inventor had the idea to put the hole on the needle. And at at the head of the needle. Yeah. Not at the back. Yeah. And this was all the patent. And this was the killer patent. Yeah, that's it. That was the story of Puff and gave them 20 years, you know, monopoly on those sewing machines.

Toby: [00:34:10] And in those 20 years they would file additional, additional, additional of course, you know, to, to create finer and finer and and it's like a net, right? It's like a net of patents across a core point which at some point would have expire. But you know, then you would have already started to branch out and use other parts of the of the intellectual capital. Okay. Very, very interesting. So I think, you.

Andreas: [00:34:35] Know, but here you have to take care, you know, because if you are a supplier, then to somebody who is a top tier, yeah. Then you may have a problem because they are doing this as well. So they are taking your product and they're making improvements, they're making enhancements, they are filing the patents, referring to your next year. Yeah. And when you go next year to discuss about the price. Yeah. Then they will tell you, oh, you know what, we should talk again about this. You know, that is interesting.

Toby: [00:35:06] So look, in first of all, super interesting and also thanks for sharing your anecdotes. I mean, I didn't know this about the screws. I still have to think about that now. Now we have come from screws to nails. So this is I think this is a nice conclusion to this particular session. And and I think we could do many, many follow ups. But I think in conclusion, we can say, um, IP backed intellectual property backed assets, loans, stocks, equities. Et cetera. Carry less leverage. Less risk. Yeah. Um, lower downside, but potentially higher upside and more sustainability. Right? More sustainability from an investment perspective. So if somebody doesn't know what to do, investing in IP or investing in innovation. You know, in addition to purely looking at numbers, which can be very misleading these days. Exactly. Is probably not a bad move.

Andreas: [00:36:09] Yeah. No, no, we have as well, you know, we have a Yeah. Offering as well services, you know, for different other groups. We're not only selling, you know, our signals etcetera. And one of our client is, is bdc's the Business Bank of Canada. And they set up a fund. It's approximately $170 million Canadian dollars. And they are doing corporate lending, um, based on IP and we are doing the valuation, you know, for their targets and the potential, um, yeah, borrowers and um, and they are going pretty well. I think it's the second or third time. It's, it's, they are honored because they have really brilliant returns. They have no defaults, they're going very well and we are aiming as well to do something similar in Europe. So we want as well to set up a backed lending bank.

Toby: [00:37:04] It's a bank for which you can it's a non bank, maybe we can call it the non bank, but an intermediate.

Andreas: [00:37:10] Yeah. We want to set up an intermediate where we will give guarantees on on patent value to the lending banks. So if there is a lending bank who wants to, uh, who did the due diligence but does not know about the patents of the company, then we could give a guarantee amount on the certain patents.

Toby: [00:37:35] Look, Andreas, thank you so much. I think this is the missing link in the finance world from a liquidity perspective, especially in those times that merits for a separate discussion. Maybe under Toby Talks, this was more like a you know, I wanted to introduce you as a friend because I found it super interesting when we exchanged on that panel. So once again, I, I really want to thank you for your input and I hope we see each other, see each other again soon. And we can catch up on a separate show in in the next few months.

Andreas: [00:38:12] Yeah. Thank you. Thank you very much, Toby. I'm really honored to be. Yeah. On your, uh, on your show. Let's say you're on your podcast, and. Yeah, we'll do it again. Hopefully. Perfect.

Toby: [00:38:25] Thanks, Andreas. All the best.

Andreas: [00:38:26] Thanks. Take care.

Video Version of “What’s Intellectual Capital?”

A conversation between Andreas Zagos and Toby Ruckert. To view, please upgrade to Premium.

If you have any follow up questions to this talk, Andreas and myself would be happy to answer them.

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Toby & Friends
Welcome to "Toby & Friends" – the podcast for the self-curious. Here you’ll meet creative thinkers and doers who share their knowledge, wisdom and experiences with other listeners and aspiring Polymaths, covering topics relevant to our current times.
"If you are the smartest person in the room, then you are in the wrong room." Taking Confucius' wise words to heart, the idea of this podcast series is to exchange with (smarter) friends in a virtual campfire session, without sponsorship and no particular agenda, but in the true spirit of polymathic learning, simply by sharing knowledge and thus coming up with new solutions to the most pressing problems of Modern Times.
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