How much is my intellectual property worth?

Your intellectual property is worth what it can earn, and appraisers get at that three ways. The cost method asks what recreating it would cost. The market method compares sales of similar IP. The income method, the one buyers care about, projects the revenue the IP will generate and discounts it to today.

The 25% rule you will see cited is a licensing heuristic: a licensee pays roughly a quarter of the operating profit attributable to the IP. Courts have pushed back on it as a litigation shortcut, but negotiators still use it as a starting anchor.

For a freelancer, the practical version is simpler: your work's value is set by the rights you sell with it. Full ownership transfers price higher than limited licenses, so write which one the client is buying.

An intellectual property agreement makes that rights-for-price trade explicit.