How to Increase Startup Valuation by Leveraging Intellectual Property

By: Andrew Rapacke

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

A 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.

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