Have you ever heard the expression, “you have got to spend money to make money?” It is often a necessity in entrepreneurship to invest in yourself in order to get others to invest in you and your business. But how much startup medical device companies can afford to invest in themselves is often a tough analysis to perform. Funds are limited for a company that is in its early stages of development, so it becomes very important to prioritize opportunities to invest in yourself based on an estimated return on that investment.
Investing strategically in intellectual property (IP) assets can lead to significant boons for a startup medical device company. While funds may be tight initially, the act of acquiring IP assets can open up a number of possibilities for a company – IP assets make companies more attractive to prospective investors, and certain IP assets can be monetized through licensing agreements. Not only can IP assets prove to be a means for obtaining funds to further grow and develop your company, but they can also help establish your company’s place in the market.
How IP Assets Can Help Med Device Startups Raise VC Funding
Ever watch an episode of Shark Tank or Dragons’ Den? The panel of potential investors always wants to know if the company pitching to them has a patent! Startups that have IP assets, such as provisional patent applications or issued patents, are more likely to be offered funding from external sources, such as venture capital groups and angel investors. Not only are startups with IP assets more likely to get funding, but they are also more likely to get larger amounts of funding based on how many IP assets the company has secured and the quality of those IP assets.
Why is this the case? A company that owns its own IP conveys to prospective investors that the company believes in its own future success, and that the company takes its own development and growth seriously – seriously enough to pay for securing IP protections. The cost to obtain legal protections on IP can cost upwards of thousands of dollars. That is why when startups invest in their own initial IP assets, prospective investors take notice!
IP protections that are of good quality and are focused on core assets of the company can imbue a medical device company with a business advantage. When startup companies hold IP assets that create a barrier to entry for competitors, create a strong defensive IP position for the company, and/or generate a source of licensing revenues for the company, prospective investors do not fail to take notice.
Interested in protecting the key features of your medical device? Call us today for a free consultation at 954-951-0154.