Why Investors Want To Know About Your IP
Acquiring funding for a startup or business venture can be a challenging process, requiring substantial effort and commitment. However, there is one crucial aspect that entrepreneurs should not overlook: the protection of their intellectual property (IP). It is imperative to safeguard IP not only for owners but also for potential investors. Understanding what falls under the term “intellectual property” is crucial, as it is a valuable asset for any startup.
In essence, intellectual property encompasses the property of the mind in terms of the product, outcome, and ideas generated by the team. It can be categorized into four types: patents, copyrights, trade secrets, and trademarks, all of which are essential assets for any budding business. IP serves as the foundation for the competitive edge of a startup in the market, setting it apart from its competitors.
IP is a significant financial and legal asset, often estimated at over 80% of a company’s total value. However, as an intangible asset, it is vulnerable to copying by rivals or theft if not appropriately protected. Hence, it is crucial to safeguard it from the outset. Just as startups insure and protect their logo, brand, and physical assets, they must also prioritize the protection of their IP. This proactive approach will help minimize potential risks and attract potential investors who seek to invest in companies that take their IP protection seriously. Check out the following infographic for more information and tips!