Coming up with a valuation acceptable to both parties is one of the stickiest aspects of getting a licensing deal done. The problem is even more acute when dealing with very early-stage IP, according to Judith J. Albers, PhD, chief operating officer of Excell Partners, Inc., a New York State-supported seed fund based in Rochester. "If you're a later-stage company, you can calculate your value based on revenues because you actually have revenues," she explains. "Or you can calculate discounted cash flow because you actually have cash flow. Too often, however, seed-stage companies have nothing. They're doing calculations based on financial projections, which is essentially a best guess based on wishful thinking." What's worse, the valuation task typically is outsourced to teams of consultants who spend tens or even hundreds of thousands of dollars assessing factors like strength of intellectual property position, prices paid for comparable technology, potential profit margins, future growth prospects, and useful economic life. Yet even after all that, the two sides can remain worlds apart at the negotiating table.