Unlocking Hidden Value: Why Trade Secret Valuation Must Be a Boardroom Priority
By Mary Guzman, CEO & Founder, Crown Jewel Insurance – October 1, 2025
Almost every company I meet these days claims to be "data-driven." They're proud of their cybersecurity programs, they've invested in patents, and they've spent millions building out compliance and infrastructure. And yet, when I ask the most basic question - what are your trade secrets worth? - the room usually goes quiet.
That silence should concern every board and every executive. Trade secrets are often the very things that make a company different from its competitors, yet they remain the least measured and least protected. If you don't know their value, you're not only underestimating your upside - you're leaving yourself dangerously exposed.
I recently made this point in IAM's Special Report on Trade Secret Strategy, which highlights how this issue is moving quickly from a legal afterthought to a boardroom imperative.
Valuation Comes Before Protection
The instinct for most organizations is to jump straight into protection. They lock things down with NDAs, access controls, encryption. But without valuation, all of that effort is guesswork.
You can't know which secrets deserve the strongest safeguards if you don't know their worth. That's why so many companies overspend on information that doesn't matter - and under-protect the small set of secrets that drive their true advantage.
At Crown Jewel Insurance, we built the TSARM™ framework - Trade Secret Asset Risk Management - specifically to bring discipline to this problem. The order is deliberate: Identify → Value → Protect → Insure → Mitigate
Skip identification and valuation, and you're essentially protecting everything the same way. That isn't risk management at all. It's flying blind.
The Discipline of TSARM™
Identify: Map your secrets with precision. Courts no longer accept broad categories like "confidential information." You need clear definitions - pricing models, AI outputs, sourcing know-how, M&A strategies.
Value: Assign credible numbers so you can prioritize what matters.
Protect: Deploy safeguards that match the value and exposure of each asset.
Insure: Structure first-party coverage around the crown jewels.
Mitigate: Have playbooks for response, quantification, and recovery when losses occur.
Think of it this way: you wouldn't insure a home without knowing whether it's worth $200,000 or $20 million. Why treat trade secrets any differently?
Litigation and the Rising Stakes
Trade secret disputes are on the rise, fueled by employee mobility, digital collaboration, and a competitive race for innovation. Courts expect more than vague assertions - they want specificity, documentation, and credible evidence of value.
The damages are growing, too, often reaching into the hundreds of millions. Without valuation, you enter that process on the back foot. With it, you anchor your claim, improve negotiating leverage, and transform your story from speculative to evidence-based.
How to Value Trade Secrets
Valuing trade secrets isn't guesswork. The same accounting methods used in M&A, tax, and IP contexts apply here:
Cost Approach - What did it take to create the asset? (Payroll, capex, overhead)
Income Approach - What revenue, savings, or margin lift does it produce? Discounted to present value.
Market/Hybrid Approach - What would comparable assets command in a licensing or acquisition deal?
One very important nuance worth noting in the digital age is that in fast-moving sectors like AI, the useful life of a trade secret may be shorter than in the past. That makes valuation even more urgent, not less.
Beyond Defense: Financing and Growth
Valuation is about more than litigation or insurance - it turns secrets into strategic capital:
Financing - Specialty lenders are beginning to recognize valued, insured trade secrets as collateral.
Investor and M&A Leverage - Presenting a portfolio of valued secrets changes how buyers and investors view your company.
Licensing & Partnerships - Numbers bring confidence to negotiations and structure to deals.
When treated properly, trade secrets stop being hidden costs and start becoming measurable growth drivers.
Fiduciary Duty and Board Accountability
There's also a governance dimension. When trade secrets are lost, boards and executives will be asked whether they did enough to protect them.
A documented process of - identification, valuation, protection, insurance - provides a defensible answer. It also acts as a deterrent: when employees, vendors, and partners know assets are identified, valued, and insured, it creates tangible evidence of their status and increases the perceived cost of misappropriation.
Where to Begin
This doesn't have to be overwhelming. Start with a handful of assets that you know drive competitive edge - maybe it's a pricing algorithm, a process recipe, or a sourcing strategy. Put them through the TSARM™ sequence. Value them, align protection, and brief your board.
That one exercise can re-frame how your leadership team thinks about risk, capital, and opportunity.
The Bottom Line
Trade secrets are property with measurable value, legal protection, and strategic potential. These assets must be valued and properly protected.
Companies that understand this will be better positioned to raise capital, negotiate deals, and withstand litigation. Those that don't will eventually learn the hard way - when their most valuable assets walk out the door.
For more on this shift, I encourage you to read IAM's Special Report on Trade Secret Strategy.
Mary Guzman
CEO & Founder
Crown Jewel Insurance
