In today’s innovation-led economy, intellectual property (IP) is far more than just a legal “tick box”.

On the contrary, IP must be considered as a cornerstone asset for start ups and early-stage businesses aiming to attract investors and secure funding.

Whether IP is accrued through patents, trade marks, designs or a combination of these, the protection acquired demonstrates value, fosters trust and opens doors to opportunities.

Intellectual Property as a Foundation for Business Growth

Start ups with IP protection are substantially more successful in securing seed funding compared to those without. In fact, they were found to be more successful by a factor 10.

Intellectual property often represents a significant portion of a company’s value and particularly in sectors driven by innovation such as the tech sector.

Investors are increasingly focused on IP when evaluating businesses. Through their own experience they fully understand and recognise the role IP plays in protecting ideas and creating sustainable market advantages.

Start ups and businesses have to understand and recognise this too.

Start ups with patents and/or trade marks stand out in funding rounds because they have a notable edge. By protecting their innovations, businesses have greater security because it is harder for competitors to copy them.

A study by European IP offices highlighted a key insight: start ups with IP protection were substantially more successful in securing seed funding compared to those without. In fact, they were found to be more successful by a factor 10.

This is not at all surprising; protected IP not only enhances credibility but also strengthens a business’s ability to compete and grow.

Why Investors Care About Intellectual Property

For investors, IP provides the clarity and confidence they are looking for:

  • Credibility: Granted (and pending) patents and registered trade marks signal that a business is serious about its long-term strategy and market position.
  • Market positioning: IP protection creates a defensible competitive edge; competitors will find it harder to copy a business’s legally protected assets and will look elsewhere for easier pickings.
  • Scalability and value: IP can be monetised through licensing or partnerships; it is a scalable asset that grows with the business.
  • Strategic exit potential: In the event of a business sale, strong IP assets can significantly increase valuation.

By securing its IP, a business creates a narrative that resonates with investors. It tells the investor: this business is prepared, it has a unique angle which is legally protected and it therefore has growth potential in the right market.

The Risks of Ignoring Intellectual Property

Despite the huge importance of IP, many start ups neglect it as a priority. They consider IP to be a “we’ll do it later” task.

That can often be a fatal mistake.

Such oversight can leave innovations vulnerable to copying and diminish market opportunities. This can damage the potential to attract funding, the lifeblood of any start up.

Without IP protection, there are often no legal barriers to deter competitors and they can (and do) take advantage.

Making Intellectual Property Work for You

For start ups and early stage companies, securing IP is not only about filing patents or trade marks; it is just as much about aligning IP protection with a broader business strategy.

What have you created, what do you need to protect and how are you going to do that?

By answering these questions and then achieving the objectives you will have a much better chance of attracting not just investors, but the right investors for your business.

By incorporating IP into your growth plan you will build a foundation for your business that leads to outside investment and supports market success.

Clear messaging, such as showcasing a “patent-pending” product or denoting a trade marked brand, sends a powerful signal of readiness and innovation.

These messages also signal that you have legal nous. That is something your competitors would rather not see.

Speak with SH&P to Unlock Your Potential

Stevens Hewlett & Perkins (SH&P) specialise in helping innovative businesses understand and harness the power of IP. Our team works with start ups and growing companies to craft tailored strategies that align with their funding and growth objectives. From initial assessments to securing robust protections, we are here to support your journey.

Ready to secure your competitive edge? Contact SH&P today to explore how our expertise can help you protect your ideas, attract investors and unlock your business’s full potential.

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