Venture Capital & Investors Want Intellectual Property
Investors and venture capital firms pay close attention to IP due diligence. Preferential repayment schemes, political rights (voting) within the company, and agreements can be put in place but without clear ownership investors will skip to the next project. It is all about control, certainty and risk management for the resources they bring to the company.
Due diligence also includes pending infringement #lawsuits (patents, trademarks, copyrights, trade secrets), existing licensees, and IP pending at the USPTO and US Copyright Office. Industries where technology and innovation are involved get more funding and sales than non-IP related industries.
IP represents most of a business’s value and even more so for companies in their early stages. Strong contracts with employees and contractors clearly defining ownership, licenses, derivative works and works for hire, along with NDAs and covenants not to compete are also needed.
If you have IP that has not been filed yet, then let’s talk. Do not let the next venture capital firm and anger investor slip through your fingers because your intellectual property is not protected!