Startups rethink IP strategies to attract investors

Startups focus on patent portfolios and IP management.

Startups are increasingly prioritising their intellectual property (IP) strategies, which has become a critical factor in looking to attract investors and grow their businesses.

In the past, many companies struggled to figure out what to do with their IP after emerging from research institutions. However, Aditya Mathur, Founder and Managing Director of elev8.vc, noted that today, startups with intangible assets, such as scientific breakthroughs or engineering capabilities, are beginning to think about IP from a strategic perspective.

This shift in mindset is particularly evident in deep tech startups, where IP is viewed not only as a business development tool but as a defensive moat that protects a company’s value. 

Dr Koh Shuwen, Director of the Innovation Transfer Office at the National University Health System, emphasised that startups need to "think about their patent strategy" early on.

Mathur pointed out that venture capitalists, especially in deep tech, seek companies with strong IP portfolios that include core patents and additional foreground IP that would be difficult for competitors to crack. 

"What we would be looking for when founders are trying to pitch to us with incredible technologies is, how are they thinking about both patenting core IP and or having additional foreground IP," Mathur said.

Dr Koh also warned startups about common IP management pitfalls. One of the biggest mistakes startups make is requesting IP assignments too early. 

"Deep tech startups are still in an unstable stage," Koh explained. An exclusive IP licence is often sufficient for a startup to get started, while assigning the IP outright can create legal and financial implications if the startup fails. "If we were to assign the IP and something goes wrong, there's very little recourse," Koh said. 

Additionally, Koh advised startups to work to build their own foreground IP quickly, as this strengthens their intangible asset portfolio and enhances their chances of securing follow-on funding.