What is IP?
An IP refers to Intellectual Property, typically intangible that is the result of creative input. Intellectual property can be protected in various ways: by a patent, a registered design, copyright, design right, trade mark etc. The type of IP protection you will need depends on what is being protected and how it will be used. Protecting the IP guarantees any potential commercial benefits of ownership and allows the owner to manage how their IP is used and who uses it.
In some cases patents along with copyrights, trademarks, negotiated contracts and trade secrets are crucial to securing funding. This can be especially true within the medical and health care industries, but also applies to electronics, computer hardware and software to name a few.
In other words, once protected, the creators of the IP own it and have exclusive rights to its use. Competitors cannot simply copy or reproduce your technology or ideas.
Angel investors are attracted to the potential that the Intellectual Property represents and the impact this can have on the success of the business. The investor will want to be sure that the technology and ideas that contribute to its potential success are protected and cannot be copied or reproduced by competitors.
So will a patent make you money? The answer is of course no. The Institute of Patentees and Inventors claims that each year approximately 20,000 patents are applied for by UK residents. However, the success rate of getting patented ideas to the market is currently only 2%.
Quality commercial products, astute management, potential high growth, and predictable market potential are what will drive revenue. But not having a patent could lose you money by allowing your investment returns to be diminished by more market-ready competitors who capitalise on your idea by copying it.
Considerations:
Do you presently own any IP or other proprietary assets?
If you do not own a Patent(s) for your business or have not looked into this, please do bear in mind that Angel Investors will respond favourably to any ownership of patents, patents pending, negotiated contracts or intellectual property. Having a proprietary asset of this form can give them assurances of your future success and will demonstrate your credibility and diligence as an entrepreneur. Making these efforts will also demonstrate that you are serious about what you are doing. Having a proprietary asset of this form can give them the added assurances of your future success.