Digital Font Company Evaluation

gerald_giampa's picture

Would anyone know how to evaluate a digital font company? My experience is with hot metal.

Si_Daniels's picture

This is a little bit vague - if you're talking about evaluating a digital type company with a view to licensing them some font related IP that you own then perhaps the typophile 'Release' forum would be a good place to start.

Cheers. Si

Grant Hutchinson's picture

I agree with Simon that the question is a bit open-ended. There are so many aspects of a digital type company (or any company, for that matter) to evaluate, that you really need to define what your goals are. A few areas and questions that I would start to consider would be:

1. aesthetic quality of product

2. technical quality of product

3. marketplace presence and penetration

4. ability to market and promote products successfully

5. consumer and customer satisfaction with the product

6. quality of customer service

7. quality of technical support

8. do they 'get' the web? (is their site a brochure or an extension of the total customer experience)

9. do they add value to the products they develop or resell?

gerald_giampa's picture


I have been a little soft on defining the question. Recently I have concluded, almost, a series of improvements to Lanston. We are about to release all our old fonts with the EU currency sign. I know we are late but we have had our nasty acts of god that slowed us down for several years.

The next begging phase is to complete our new type faces. Which we have several waiting. Then the task of developing a project plan for digitizing new releases. However with my energies going to that sector of the business, marketing is doomed to suffer. You can appreciate the problem.

Finland is unusual in that their government officials forcefully advise against hiring. The obvious solution is to find a healthier business environment, or sell Lanston. I might add, also, Finland is the most expensive place to live in Europe because of their social programs. (Translate taxes.)

I am therefore looking into both options. This is why I could use input from the forum. It may be of interest to others also in evaluating their own assets. I am a qualified expert in assessment for brick and mortar type foundries. In fact I have worked in serious litigation in Boston doing that very thing. I was an expert witness. As you all know, I purchased Lanston, also I made a bid for ATF but they were unable to provide a secure lease. I raised 40 million dollars to put towards purchasing English Monotype.

Digitized intellectual property has no fixed value, unlike ingots of lead, which do. But surely there is a business formulae that can determine such value. A simple rule of thumb, the font company business is worth ( x ) years gross income? would be a good starter. Brick and mortar companies, such as printing companies, the value is often calculated as say, one years gross plus fixed assets, inventory, good will, lease and contract considerations. However, intellectual properties should have a higher evaluation for cash flow derived from font sales. A printing company doing one hundred thousand dollars work per year requires skilled staff, serious rents, major capital expenditures, material cost etc. The owner will only make a small income for himself. A single owner operated font company could, with some work, achieve a gross income of half that and live very comfortably. Not rich but comfortable.

When selling a digital font company pretty much all of its value will be taxable. That would not be the case in a modern printing company. Or, in days gone by, brick and mortar type foundries. In other words, you will be getting perhaps only half of what the buyer is paying you. Computers depreciate to zero before they are paid for. So expect nothing or next to it for those considerations. In fact best to leave them on your desk.

Font delivery (downloads) to customers is almost zero and usually absorbed by the marketing cost. The work is in creating the asset itself, plus, a modern consideration, the web site development asset. Some other considerations have already been mentioned, or asked. It should be easier to determine a font companies value now the market is mature.

I think it may be a good exercise for some font developers to consider there may be a day they may need to evaluate their own works. Some day, hopefully, there will become such a need for at least one of you, or your heirs. If fonts have no value I recommend another creative occupation should be pursued.

So one may ask someone with a respectable font, how much they would sell all rights to that type face? Perhaps that is the right question to ask. Naturally some fonts outsell others. So maybe a calculated average of all the type faces in a foundries stable would provide reasonable conclusion. Also some fonts will remain dormant until they are the fad of the moment. Plus, consideration for existing performing contracts. And Web Site evaluation. One thing Lanston has that many others do not, is brand name. That supports good will, I know some will scoff but I care to differ on that particular matter. Good will, is worth something because it eases the pain of the purchaser to making their decision. Some of those customers may be large corporations.

I am also, as an alternative, looking into moving Lanston to St. Petersburg, Russia. Other options are possible I suppose. A joint venture or, partnership.

Our income is not huge but steadily growing. Our digitized work is substantial and the name brand font recognition value is substantial.

Perhaps for a start the question would be "business" is worth (X) years "gross income".

The next step is, what is it worth to manufacturer a font to commercial standards? This answer will be of great interest to many.

To solve the initial question of business is worth (X) years gross income. What value would a type developer in the Forum sell one good font with all rights not royalties?

I realize some people will hope I do not get offers, or that I do not get much for the business. But if that is the case it will set some precedence for font business evaluation. So it would be best to wish me good luck!

Maybe someone would like to buy Lanston? Don't be afraid to make an offer. At the moment I have a particular opportunity that I am interested in pursuing so this would be a good time. Also depending on the arrangements, I may finance most of the purchase. Perhaps one of you, or a small group should put some heads together and make a proposal. One of my key issues, which means I will consider less, is that I do not wish to getted bogged down with months of accounting and legal issues. That I am looking for a simple, clean deal. Further I do not wish to work on site, but would consider continuing in some aspect through the transitional phase.

Diner's picture

Hi Gerald,

Your question to me seems more obvious that you may suspect.

Lately the rule of thumb I've been aware of is that a companys buyable value is worth 3X its total gross income of its most recent fiscal year end. So, a foundry that grosses $100k per year could be purchased for $300k outright.

Costs related to "prior" software development efforts are essentially mute in regards to the eventual purchase price of the foundry. It's time and money invested during the course of the business and essentially a final sale. . .

Beyond that, while digital foundries have very few material assets that can be estimated as an approximate value compared to a metal foundry, it is very important to distinguish they cannot be considered in this manner.

A digital foundry should be considered a software company, much like Adobe, Quark, Pryus, you name it. We make software, not metal slugs . . . Our only assets for sale are the hours taken to develop the software as well as the source code of the software.

What is that worth? As little as the seller is willing to take for it. . .

And in the end, regardless if you are able to purchase the foundry, chances are you're better off simply creating a new one for free and save all that money to reinvest in your own business.

Stuart :D

gerald_giampa's picture

Stuart Sandler

Lately the rule of thumb I've been aware of is that a companys buyable value is worth 3X its total gross income of its most recent fiscal year end. So, a foundry that grosses $100k per year could be purchased for $300k outright.

And in the end, regardless if you are able to purchase the foundry, chances are you're better off simply creating a new one for free and save all that money to reinvest in your own business.
I think you may have to work several years to develop a $100k gross per year font company. For most of those years one might expect to be eating out of trash cans. I am speaking of consumer fonts, not custom. In other words I predict it would take more hours to come up with completely fresh products with market awareness for $300k worth of work which is what you anticipate to sell the company for. Most importantly, starving through it. Probably it would be best to buy with the other persons money which would take only three years making the fourth and following years free.

You see what I am getting at.

But this part certainly is a key.

So, a foundry that grosses $100k per year could be purchased for $300k outright.

This interests me very much. I am wondering how you came up with this figure? And certainly I must agree, it is impossible to evaluate a lead type foundry the same way as a digital foundry. Admittedly there are some similarities.

Or maybe Lanston should not be compared evenly to other font companies. Such as there are many idle assets waiting. Some can make money without any work except by having to eat in a fancy restaurant, travel to an exotic location for free and sign a piece of paper.

One example is that we have a contract that is worth $75,000 however the term of payment is only $700.00 per year of which about 5 are now exhausted. They paid $5000 up front. The nice aspect of this contract is that Lanston did the work in the twenties. Nothing digital. So all the money is strictly a license for "intellectual property, not data". All the same $700.US comes in mighty handy. Not so handy when I have departed. For someone else it will however. I can tell you the $5000.US came in very handy. I lived in Canada and our dollar was down, down, down.

Intellectual property has proven to be a long term payer. In the EU new regulations protect for 70 years after death. I may have mentioned this before, a taxi cab driver that listens to the radio when he or she is driving a customer has to pay a "song royalty?"

Let us examine Times for example, most of the money was made long after the designer was dead. The company still does well with it.

Some how there has to be, or should be a factoring of this sort of consideration. In other words I believe this to be unlike an ordinary software company in that very few software companies "make money for old rope".

Software has a very short shelf life, font design has a proven history of hundreds of years. So the shelf live of type design is long I suggest an extension of the amortization figure. I refer to the

3X its total gross

This is the question that 3X its total gross invites, would any type designer sell their font for three years gross royalties? We speak of consumer fonts.

What do you figure the cost of making a new font would be? How much does Adobe, or Agfa value their fonts in annual reports? Are they flat rate averaged. Production based figures. Or are they sales based, or blending of the two?

Small note. I have always felt it to be a mistake for type designers and font companies to think of themselves as "software companies". I prefer the wisdom of Sol Hess at the Lanston Punchcutting Department. He insisted Lanston was in the art business.

Certainly there are unmistakable parallels to the music industry.

.00's picture

I look forward to the day when we retire the word "foundry" as it relates to digital type. No matter how you multiply its assets.

gerald_giampa's picture


Lanston was a digital typefoundry". We produced digital data to generate patterns. Patterns were used as masters for the Benton Pantograph. This process was used cutting Sumner Stone's type face. So you are going to have to forgive me for been somewhat accurate.
Here is the pattern outline.

Lanston produced digital data with additional data allowing for hot metal fit using the 18 units hot metal Monotype keyboard system. This additional data provide WYSIWYG which was unlike the older system. For this you needed nothing other than a Macintosh. (In those days) But it was intended for an even deeper digital development in hot metal founding. You will see, as you read onwards.

This is the old system which was setting blind. right hand column

Lanston also wrote a digital keyboard program with a slave computer driven Monotype Caster. Marketing these developments was abandoned by the go mod board of directors. As you can see, we were going to provide digital typesetting hot metal solutions. English Monotype did the same thing. They also had a computer hot metal Monotype keyboard.

The advantage of our system over theirs, is ours eliminated Monotype controller paper entirely. That alone saved $3000.00US per year, per keyboard.

Theirs did not.

This page has a list of some modern Lanston developments.

Previously we developed a hand setting program on a TRS 80.

In any event, old habits die hard. I have seen many, strictly digital developers, borrow the same phrase. That is where one could start drawing lines.

As you well know, other hot metal terminology has survived past honesty. Some rather misleading. Points and picas for instance, are now

Diner's picture

Hey Gerald,

For whatever reason when I attempt to view the links, all I seem to get is a Network Solutions domain park notice.

Has the DNS propogated for that URL?

Stuart :D

gerald_giampa's picture


Has the DNS propogated for that URL?

I am a little ignorant. What does that mean"

For the life of me, I can not duplicate your problem. I am transferring to a new web hosting server but that is not complete yet. I can still access my email on the old server. If the transfer is complete it should be at the new server.

And I am not having problems with the links here. Could you give it a second try and report?


gerald_giampa's picture


I like your new logo doo-hickey. Also I pay attention to your list. thank you. Do you mind if I borrow them? There should certainly be evaluation concerning these in mind. It leans towards excellence.

.00's picture


I prefer any name that doesn't refer to melting and casting molten metal. Since I doubt anyone does this anymore. Of course, those of you who still cast molten metal should continue to use the word.

Grant Hutchinson's picture

> Grant, I like your new logo doo-hickey.

Thanks. It's an ad for TWA from an old National Geographic I had cluttering up my desk. I love how everybody waved at the camera in those old advertising illustrations.

> Also I pay attention to your list. thank you.
> Do you mind if I borrow them?

Not at all. Those particular points are just the ones off the top of my head. Looking at the list again, I may been able to fine tune it a bit further. There are certainly other aspects to consider as well.

By the way, I cannot see your pages either. They are currently pointing to Network Solutions. The reason that you may not be seeing what we are seeing is due to the fact that the name servers which contain and propagate the various internet address lookups, do not globally update at the same time. The name servers that your internet service provider uses (and that your computer accesses) may have received the most current information regarding the domain before the name servers that other Typophiles access.

gerald_giampa's picture

Actually James,

There are many still making a living casting lead types, Mexico and Equador in particular. Also M & H, Jim Rimmer, Harold Berliner is a serious participant. The ATF Fellowship is still very active. New types are getting cut as we speak. Composition faces at that. But I do agree that carrying terminology over has questionable merits. But, fitting into the same category.

Type Face
Type Design
Points and Picas

Do you prefer something like Digital Alphabet Makers? Whatever, sounds screwy but maybe you have a better idea. I am sure you must. This is a good forum to rename the industry. You will be needing general consensus.

Unless my browser is different than your browser it looks like you are a little late to complain. Perhaps you might take it up with Sumner Stone. I think he calls himself the Stone Typefoundry. I have his e-mail if you want it.

But I am unclear as to the purpose it has in this particular thread.

gerald_giampa's picture


Thank you again. I will look into that. This is the second time we changed servers. The first when I moved from PEI to the West Coast. That did not go well either.

Do you have any suggestions how I can push them along with the matter?

jim_rimmer's picture

In the early days of digital typeface making, I sort of resented people who had never even seen (an assumption on my part) the operation of a casting machine or the cutting of a punch or matrix, using the designation "foundry" in their company name.

When you get right down to it, as Gerald Giampa has noted, type of today uses many of the terms that have survived from metal type through phototype, up to current technologies. One that irritates the hell out of me is the misuse of the word "kern".

It seems to me that perhaps there is only a harmless affectation in the use of the name "foundry".

In naming my own small digital typeface company, I have used the name Rimmer Type Foundry. Since at the moment I am nursing an annoying metal burn on two knuckles of my left hand, incurred while changing the choker valve on my Thompson Caster, I defend my use of the word.

I've never done so much work in my life over the past five years as I have in designing and completing my own book of digital faces. In spite of all that effort, I still make more money from the casters, panotgraphs and printing presses. This is not a whiney complaint; merely an observation that surprised me when I added everything up.

Only partly in jest: perhaps anyone using the designation should be obliged to spend a week in a working foundry getting dirty and scorched.

In this regard: I am waiting to hear from a couple of people who have voiced interest in spending two free days with me in type cutting and casting.

What IS a good replacement name for "foundry"?


Grant Hutchinson's picture

> Do you have any suggestions how I can push them along with the matter?

Sorry Gerald, there's not too much that you can do at this point other than wait for the propagation gods (or gremlins) to work their boogie-woogie. Changing servers unfortunately leaves you at the mercy of those unseen little critters that push the data around the internet. Give the changeover another 24 hours or so to shake out.

gerald_giampa's picture

That's what I figured. This could breed a whole new world of superstitions.

John Hudson's picture

I don't mind the term 'foundry' in reference to digital type makers. I do object to the occasional loose use of the term, when it is applied to companies that merely resell fonts. One of the nice things about the term foundry is that it emphasises a manufacturing process. In these days, when anyone with a piece of font editing software can play at making type, it is perhaps good to be reminded of the tradition of technical quality and innovation that the foundries of the past established.

hrant's picture

I do see a problem when "foundry" is used indiscrimately, not because I think people should experience the feel of molten metal on their forearms, but simply because literal foundries still exist, and that intrudes on them. But when you put "digital" as a qualifier (or you tack on something like "micro", like I've done, in allusion to microcomputers, the brewing of beer, and also smallness of scale) that's not as bad because you're expressing the honesty and romanticism of molten metal without pretending to have been burnt by it and stuff.


John Hudson's picture're expressing the honesty and romanticism of molten metal without pretending to have been burnt by it and stuff.

I have machine grease from one of Jim's devices on my sleeve, and the dry cleaners despair of me. That will teach me not to wear a white linen suit on visits to real foundries.

gerald_giampa's picture

Let's face it, most digi-folk are like photographers that wanna-be-painters.


New York Type Directors Club. Now I think this is a clue for modern naming without all that nostalgia about burnt flesh. Lumps of metal with letters of the alphabet cast on them, so-called type.
Now this must pose an interesting problem. A group dedicated to directing type which is reportedly nonexistent in New York. Certainly that falls into Russell

.00's picture

The club name is Type Directors Club. Its office is in NY. It is not the New York Type Directors Club.

You can keep foundry if you want. I will refrain from using it however.

gerald_giampa's picture

Good deal James, you can keep the word type if you want too. Even though, reportedly it is not found in New York.

The word foundry, got my burns over the many years, I earned it.

I intend to call digital type, "type", even though, admittedly, it is pretentious for others to use. I made lots of it myself over the many years, I earned it.

But us grand fathers are sweet people and we are happy to share our vocabulary with the young uns.

So have a nice day.

piccic's picture

Well, the only recent experience we had in Italy with a "foundry" dates back to Nebiolo, which "closed" in the 1970s.
When I talk with friends, in Italian, and I cannot use the term foundry, I refer to digital typeface producers as "Etichette" ("Labels").
I know this is vague, especially in English, but after all we have Record Labels, Fashion Labels and Label sounds pretty personal. I like it, more than foundry, which is pretty anachronistic. I can't see a real problem using "foundry" as well, anyway.
Not for resellers, individuals selling on MyFonts. or mere distributors, of course.
For the MyFonts system "label" seems quite appropriate to me.

hrant's picture

Hey, "label" isn't half bad!!


Bald Condensed's picture

> I realize some people will hope I do not get offers,
or that I do not get much for the business.

Now THAT'd be mean. I sincerely hope nobody on
Typophile would be so petty as to wish you ill. Good
luck in your endeavours.

Gerald, I think this is a very interesting thread which
I will be following closely (out of "academic interest" :-))
Unfortunately, this whole business side goes waaay
over my head, so don't expect any wortwhile input from
me. Sorry'boutthat. :-(

Stephen Coles's picture

What term do you prefer, James?

Stephen Coles's picture

James, Gerald, and Jim -

Forgive me, for I am young and have very little experience
with molten metal, but I see nothing wrong with using
terms that reference the industry's history, even if the
methods and tools have changed. Gerald's list is pungent
proof on its own that it would be a frivolous task to create
new words. It might be a fun exercise, but would it really
make sense for a field that already suffers from obscurity to
revamp its vocabulary?

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