The Busines of IP – Understanding and Creating Value: Part 1 – Venture Capital

In Insights

18 November, 2020

In this six-part series, Anders Isaksson explores some of the key factors and motivators for why companies small or large should obtain intellectual property. The aim is to help you understand when and how you can create value from IP, especially when considering the long and short-term goals of a company.

Whether you are a tech unicorn, a start-up or an established manufacturing firm – nothing is more attractive to potential investors than intellectual property. There are multiple reasons for this.

First, it adds a layer of protection for their investment – your inventions, brand, technology are protected and tied to the company. Second, you have taken the time to think about the value in your company, which signals to investors you are serious, have considered the short and long-term goals of your company and overall implies a level of trustworthiness. Third, intellectual property has no limit on its value – the value of intellectual property can increase indefinitely which means the investor’s investment has a great chance of increasing.

Intellectual property rights also signal to investors how serious you are about your company’s business plan. For example, if one of the reasons you are seeking investment is to expand your global footprint to say China but you haven’t yet considered any intellectual property rights in China. Then the investor compiles a due diligence report on your intellectual property rights (which are only registered in EU countries) this is going to raise a massive red flag.

By doing due diligence on your competitors (potentially through freedom to operate analysis or other intellectual property landscaping tools) you will get even more attractive to investors. This shows to an investor you are not infringing on anyone else’s IP and at the same time you have a good idea of what your competitors are up to in similar and adjacent industries, but that you also have a potential roadmap for future business opportunities.

Another exercise when seeking investment is to consider any overlooked opportunities in terms of the value of your intellectual property. This depends on to what extent you have worked with IP counsel – so this may have already happened, but if you are looking to raise venture capital – it might be worth having an expert take a second look to see if there is any additional value to be unlocked from your intellectual property.

Investors do not gamble – and intellectual property is a key decision factor when investing in companies of all sizes and industries. For the above reasons, do not underestimate the indefinite value of intellectual property and its power in securing crucial investments for your company.

If you have any questions on how IP can help your business with investors or even if you are preparing your portfolio to pitch before an investor – do not hesitate to reach out: anders.isaksson@awa.com.

Stay tuned for the second article in this series– Keeping Secrets a Secret (why it is important to keep know-how and knowledge within the company and how this can increase value when formalised through intellectual property).

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