This week, the world mourns the loss of some of entertainment’s biggest actors, musicians, and producers including Alan Rickman, René Angélil, and David Bowie. It is at a time like this when people reflect on the collection of work that was left behind.While David Bowie left his mark on the world through his music and innovative stage presence, he also left his mark on the world of intellectual property. In addition to exploring the oddity of copyrights in space and brilliantly predicting the anarchy in musical arts and business soon to be created and cultivated by the internet, Bowie was a pioneer of IP business transactions. With the assistance of a boutique investment firm, Bowie used bonds based on future royalties on publishing rights and master recordings from his previously-recorded albums to raise $55 million in 1997. At the time, it was one of the few instances when a musician leveraged his own intellectual property as collateral.This concept of IP financing, or the use of patents, trademarks, and copyrights to gain access to financial credit, is based on the speculation and estimation of the incredible potential value of IP rights to individuals and companies. Initially, it was thought that the sale or licensing of these rights and collecting royalties and other payments were the only ways to raise funds. However, IP financing can play a major role in obtaining necessary financing for future endeavors without losing valuable assets.How do I value my IP assets?Some major banks and financial institutions have their own IP valuation methods to determine the dollar-value of IP holdings. While there isn’t an industry-standard for valuation, there are four major approaches to valuing IP: Determining the historical cost of developing the original assets. Calculating the present and future value of income attributed to the assets. Comparing the assets to publically recorded transactions involving similar IP. Estimating what a licensee would pay to use the IP assets.Ultimately, the method used will be subject to the type of IP assets held and the valuator. Once a value is determined, financiers determine the amount of available credit or, in some cases, can use the valuation along with tangible assets to enhance a credit offering.What is the risk?Not surprisingly, artists of every variety tend to be protective over and sensitive about the integrity of their works. Listing the fruits of their creative labor as an exhibit to a contract can feel odd and complicate the art in unforeseen ways. The IP owner ultimately risks the loss of interest in or ownership of his assets, depending on the structure and terms of the deal. Default or other breach may lead to a halt in the business or work of the owner. There are also risks to the lender, who may require insurance and personal guaranties from the IP owner to protect the lender against defaults by the borrower and also loss of value in the assets, commonly occurring in the world of IP due to third-party infringement of assets, third-party claims that the assets are infringing, and obstacles or external challenges to the registration of formal IP rights in the U.S. and abroad.Nicole J. O’Hara is an attorney in the firm’s Intellectual Property Group, providing patent, copyright, and trademark-related services to businesses and individuals.