Intangibles Company

Intangibles Company - Myrtle Falls at Sunset. Mt. Rainier National Park
Intangibles Company

Intangibles companies have a business model that is primarily based on intangible assets. The company value lies in its ability to commercialize intangible assets and, thereby, convert intangibles into revenues. Tangible assets have a physical substance whereas intangible assets are not physically visible but nevertheless have the potential to generate commercial value.

In case intangible assets are legally protected, they are called intellectual property. Patents, copyrights, and trademarks are important forms of intellectual property an intangibles company can own.

There are several different mechanisms for an intangibles company to extract value from its intangible assets. One alternative is internal commercialization to create a marketable product or service.


The intangibles company then needs to own complementary tangible assets required for the commercialization process. Typical tangible assets required for commercialization are manufacturing and distribution facilities or a sales department.

The intangibles company can cooperate with another company in a partnership to commercialize its intangibles. With this strategy, the involved partners are able to share the provision of complementary tangible assets required for commercialization.

Intangibles companies may also decide to follow external commercialization strategies for which they do not need to own complementary tangible assets. Intangibles companies can sell their intangible assets, usually in the form of intellectual property, to another company.

Thereby, they generate one-time cash inflows. Alternatively, the intangibles company may choose a licensing strategy. The intangibles company then receives periodic royalty payments from the external licensee. In return, the licensee owns the right to commercialize the intellectual property.