Today's Tip: Destroy Your Company, Sell Patents for Billions

Most technology entrepreneurs strive to build sustainable companies that generate incredible cash flow and big profits. Work hard enough and maybe you can exit the industry as a millionaire -- or a billionaire. Sounds promising. But maybe there's an alternative path to riches. It involves destroying your company and then selling your patent portfolio for billions of dollars.

The VAR Guy

April 10, 2012

1 Min Read
Today's Tip: Destroy Your Company, Sell Patents for Billions

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Most technology entrepreneurs strive to build sustainable companies that generate incredible cash flow and big profits. Work hard enough and maybe you can exit the industry as a millionaire — or a billionaire. Sounds promising. But maybe there’s an alternative path to riches. It involves destroying your company and then selling your patent portfolio for billions of dollars.

Of course, this is a tongue-in-cheek blog entry from The VAR Guy. Or is it? After all, Microsoft (NASDAQ: MSFT) just paid more than $1 billion to acquire 800 patents from AOL, the former dot-com darling that’s now struggling to become a media company. That’s roughly $1.3 million per patent.

And last year, Apple (AAPL) and Microsoft and several other companies paid a combined $4.5 billion for 6,000 patents from Nortel Networks, the bankrupt networking company. That’s roughly $750,000 per patent.

Memo from The VAR Guy to his business partner: Stop all sales activities. Halt all new research and development. Check your closet and look under your bed. See any old patents laying around?

If not, look harder. Each one could be worth a cool $750,000 to $1.3 million. If only The VAR Guy kept better business records… He’s sure there’s a patent or two around here somewhere.

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