Title page

Contents

Acknowledgments 5

Acronyms 6

Glossary 7

Executive summary 8

Introduction: IP finance in the United Kingdom 9

Structure of this report 9

Definitions and scope 9

IP and intangible trends in the United Kingdom 10

Motivations for focusing on IP in finance 12

Complications arising from an IP focus 12

Types and sources of IP finance used in the United Kingdom 14

Introduction 14

Trends in equity investment 14

Trends in commercial lending 17

The legal and regulatory framework for IP finance 22

Introduction 22

Accounting standards 22

Financial regulations 24

Law and precedent 24

Non-regulatory factors affecting the use of IP in finance 26

Introduction 26

Business funding context 26

Unfamiliarity with IP 27

Transparent secondary markets 28

Valuation 29

The role of Government in IP finance 32

Introduction 32

Intellectual Property Office 32

The Department for Science, Innovation and Technology 34

HM Treasury 34

Department for Business and Trade 34

British Business Bank 34

UK Research and Innovation 35

HM Revenue and Customs 35

Devolved governments in Scotland, Wales, and Northern Ireland 36

Planning for the future 37

Moving forward 37

Case studies 38

Case study 1: Eseye 38

Case study 2: Inspiretec 40

Case study 3: Neuro-Bio 42

Case study 4: Glasswall 44

Endnotes 46

Figure 1. Investment in tangible and intangible assets in the United Kingdom 10

Figure 2. Share of investments into intangibles by asset in the United Kingdom (2020) 11

Figure 3. Design, trademark and patent filings before UK IPO (2011 to 2022) 11

Figure 4. Number and value of equity deals since 2015 15

Figure 5. Equity investment into technology/other IP-based businesses over time 16

Figure 6. Difference in default and loss rates between firms with registered IPRs and those without 19

Figure 7. Timeline on key events related to IP finance 33