System for and method of risk minimization and enhanced returns in an intellectual capital based venture investment

1. In an investment risk minimization system involving a venture capital investor and a venture needing investment from the venture capital investor, a method performed in the following sequence comprising:

identifying a venture having an intellectual asset;

determining a value of the intellectual asset held by the venture;

establishing an amount of the investment at least partially based on the value of the intellectual asset;

determining for the venture minimum performance conditions needed for the investment to be recouped over a predetermined period of time, wherein the minimum performance conditions comprise at least one of a return on investment goal, an earnings goal, a market penetration goal, a gross sales goal or a combination thereof;

providing the investment to the venture having the intellectual asset;

receiving a security interest in the intellectual asset, the security interest securing an ownership right to the intellectual asset upon failure by the venture to meet minimum performance conditions;

obtaining ownership in the intellectual asset if the venture receiving the investment fails to meet the minimum performance conditions;

determining whether the intellectual asset has donation value based on predetermined considerations, wherein the intellectual asset will be determined to have donation value if it is determined that (i) there is a likely future market for the intellectual asset, (ii) there is a likelihood that other ventures can use the intellectual asset, or (iii) there is a likelihood that other ventures can obtain competitive protection by restricting access to the intellectual asset;

determining that the intellectual asset has donation value and should be donated to a charitable organization;

determining an appraised fair value for the intellectual asset based on predetermined factors, wherein the factors comprise at least one of cost of selling the intellectual asset within a reasonable period of time, sales of comparable intellectual assets, cost of reproduction of the intellectual asset, opinion appraisals of the intellectual asset, and any combination thereof;

calculating a tax deduction obtained from transferring of the intellectual asset to the charitable organization; and

transferring the intellectual asset to the charitable organization at the appraised fair value of the intellectual asset.

2. The method of claim 1 , wherein the obtaining further comprises obtaining consent from the venture to own the intellectual asset in satisfaction of the failed investment.

3. The method of claim 1 , wherein the transferring further comprises identifying a permissible charitable organization to receive the intellectual asset.

4. The method of claim 1 , wherein the determining a value of the intellectual asset comprises having the intellectual asset appraised by a qualified appraiser.

5. The method of claim 1 , wherein the providing the investment to the venture comprises investing in a separate intellectual capital holding company, and wherein the intellectual capital holding company receives the security interest in the intellectual asset of the venture.

6. The method of claim 1 , wherein the determining a value of the intellectual asset comprises determining the fair market value of the intellectual asset.

7. In an investment risk minimization system involving a venture capital investor and a venture needing investment from the venture capital investor, a method performed in the following sequence comprising:

identifying a venture having an intellectual asset;

determining a value of the intellectual asset held by the venture;

establishing an amount of the investment at least partially based on the value of the intellectual asset;

determining for the venture minimum performance conditions needed for the investment to be recouped over a predetermined period of time, wherein the minimum performance conditions comprise at least one of a return on investment goal, an earnings goal, a market penetration goal, a gross sales goal or a combination thereof;

providing the investment to the venture having the intellectual asset;

receiving a security interest in the intellectual asset, the security interest securing an ownership right to the intellectual asset upon failure by the venture to meet minimum performance conditions;

obtaining ownership in the intellectual asset if the venture receiving the investment fails to meet the minimum performance conditions;

determining whether the intellectual asset has donation value based on predetermined considerations, wherein the factors for determining whether an intellectual asset has donation value comprise at least one of: (i) whether there is a likely future market for the intellectual asset, (ii) whether there is a likelihood that other ventures can use the intellectual asset, or (iii) whether there is a likelihood that other ventures can obtain competitive protection by restricting access to the intellectual asset;

determining that the intellectual asset has donation value and should be donated to a charitable organization;

calculating a tax deduction obtained from transferring of the intellectual asset to the charitable organization; and

transferring the intellectual asset to the charitable organization at the appraised fair value of the intellectual asset.

8. The an investment risk minimization system of claim 7 , further comprising determining an appraised fair value for the intellectual asset based on predetermined factors, wherein the factors comprise at least one of cost of selling the intellectual asset within a reasonable period of time, sales of comparable intellectual assets, cost of reproduction of the intellectual asset, opinion appraisals of the intellectual asset, and any combination thereof.