How to value University licensing deals using metrics other than the
ones listed below:

Hello Everyone,

I have been trying to come up with some new metrics for valuing
licensing arrangements. This is for a University division that
licenses new technologies developed at the University to start up
companies. We want to develop new metrics that tell us how well we are
doing compared to other schools. Currently we are using the following
metrics:

Total Research Expenditures ($Millions)

Invention Disclosures (per Million of research expenditures)

Patents Filed (per Million of research expenditures)

Licenses Options Executed (per Million of research
expenditures)

Licenses Options Executed (as a percentage of all licenses options granted)

Number of Startups (per Billion dollars in research expenditures)

Return on Investment (revenue from licenses granted / research expenditures)

These metrics may tell us some things, but they do not tell us the
relative value of the companies that are created long term as a result
of the licenses. For example, another university may license a large
number of technologies that are developed into a large number of low
value companies. Their metrics would look better than a University
whose licensing arrangements led to the commercialization of a few
highly valuable and profitable companies.  The few highly valuable and
profitable companies would not generate significant revenue for the
school from the licensing, but economically would be more valuable. 
The reason the licensing does not generate significant revenue is
because the University licenses out the intellectual property very
cheaply in order to encourage new enterprises.

I am thinking along the lines of analyzing the licensing deals based
on the amount of venture capital invested in the early stage
companies, the reputation of the VC firms that invest (1st tier, 2nd
tier, etc.), or any other metrics.

Any help or ideas will be appreciated! Thanks.

Jeff

I'm not a google researcher, so won't go into the details that this
question merits. But as an idea you might want to weight the number of
companies created with the initial investments of the startup.

Hello.  I am in the venture industry so maybe I can help.  This is a
very complicated and subjective process and depends upon several
factors such as the industry, market valuations of publically traded
companies, duration of patent, and many other factors.  One way is to
find comparables through SEC filings, which often list licensing
terms.  It is an extraordinary difficult process that is difficult to
model for every industry.  However some generalizations can be made
and customized for each case.

As a starter, I recommend you check out the following C-Level book,
The Startup Company Bible for Entrepreneurs (M. Stathis) on Amazon. 
It is truly the "Bible" for startup and early stages and contains a
discussion about valuations of high-tech companies as well as other
issues.   Good Luck!