Crafitti’s Multi-Dimensional Multi-Perspective (MDMP) Valuation Methodology
Crafitti Consulting’s MDMPTM valuation methodology has developed on a series of methods starting from financial valuation approaches (capitalization approach, cost-based approach, income approach, and market approach), enhancing with a Balanced Score Card perspective, and including a multi-criteria decision-making process such as Analytic Hierarchy Process (AHP). However, we realized the perception of future, although being captured in these enhanced methodologies, don’t take care of multiple futures that may unfold. For example, the drawback of commonly used Discounted Cash Flow model under income approach is that it does not capture the unique independent risks associated with patents. All risks are lumped together and are assumed to be appropriately adjusted for in the discount rate. In nutshell, the models used for valuing patents are general not specific. They cannot be used to value each and every patent. Sometimes a single method cannot value patent so more than two methods are also used. Although these methodologies are widely used to value patents, they don’t provide accurate results.