Full Definition
Intellectual property (IP) refers to creations of the mind that are legally protected, including inventions, brand names, artistic works, and proprietary business information. For startups, IP is often one of the most valuable assets and a key consideration in fundraising and due diligence.
Types of Startup IP
- Patents: Protect inventions and technical innovations (20-year protection)
- Trademarks: Protect brand names, logos, and slogans
- Copyrights: Protect original works like software code, content, designs
- Trade Secrets: Protect confidential business information (algorithms, formulas, processes)
IP Due Diligence
Investors verify that a startup properly owns its IP during due diligence. Key checks include: IP assignment agreements from founders and contractors, freedom-to-operate analysis, and patent landscape review.
Real-World Example
A medtech startup with 3 filed patents and proprietary AI algorithms uses its IP portfolio as a key differentiator in fundraising, supporting a higher valuation.
Related Terms
A sustainable competitive advantage that protects a business from competitors, like a castle's moat.
The comprehensive investigation and evaluation of a company before finalizing an investment deal.
A secure digital repository where startups share confidential documents with potential investors during due diligence.
Activities undertaken by a company to innovate, create new products, or improve existing offerings.
A condition or capability that allows a company to outperform competitors in its market.
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