How to Increase Startup Valuation by Leveraging Intellectual Property

2 minutes

Table of Contents

Andrew Rapacke
Andrew Rapacke is a registered patent attorney and serves as Managing Partner at The Rapacke Law Group, a full service intellectual property law firm.
Increase Startup Valuation Intellectual Property

By definition, a startup is a company with big ideas and a small budget.  The goal of a startup is to show prospective investors that, with the right funding, the company could implement the startup founders’ ideas on a large scale.  If you are part of a startup and go around pitching your ideas to potential investors, it is natural to worry that someone with a bigger budget will take your idea for a product and use their capital to produce it, thus excluding you from what you created.  Intellectual property protections, including patents, are an important way to protect your ideas from being stolen by companies with deeper pockets.  An intellectual property lawyer for startups can help you implement a patent strategy that serves the best interests of your startup, whether it involves getting provisional patents for your inventions, buying patents for existing technologies, or both.

Provisional Patents Are a Startup’s Best Friend

provisional patent gives you the right to say, truthfully, that your invention is “patent pending.”  This means that, even if you are still working on developing the product, you have some protection for it in the form of intellectual property.  Provisional patents differ from other patents in that they last only one year.  Therefore, the process of getting a provisional patent is a lot faster than getting other kinds of patents, and they are much less expensive.  The next year, when you have continued to modify your invention, you can apply for a new provisional patent.  This way, when you pitch your idea to prospective investors, the most up-to-date version of your invention will still have provisional patent protection.

Buying Existing Patents Is a Wise Investment

There are almost no truly new inventions; new technologies build on previous research and improve upon existing products.  Some big technology companies, such as Microsoft and AT&T, have entire departments devoted to research and development.  These companies own patents for many more technologies than those present in their currently available products.  At any given time, they are only actively using some of those patents, namely the ones related to products they plan to make commercially available in the foreseeable future.  They also own other patents that they are willing to sell to someone who is likely to develop useful products based on them.  If your startup buys one or more of these patents, the intellectual property belongs to you.  If an investor later buys the patent you have bought, or even buys your whole company, patents and all, you stand to gain financially.

Contact the Rapacke Law Group About Intellectual Property Strategy for Patents

Developing a prudent strategy regarding your startup’s intellectual property has as much bearing on the future success of the startup as your invention itself.  An intellectual property lawyer with experience working with startups can help you invest your resources in the intellectual property that will benefit your company the most and can help protect you from being vulnerable to having your ideas stolen.  Contact the Rapacke Law Group in South Florida for a free consultation.

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