August 28, 2023

How to impress sharks, dragons, and angels (and maybe become a unicorn)


The marriage of innovators with investors can be powerful, from many perspectives. In addition to the economic benefits, the positive energy generated is infectious and can encourage innovators and investors to take great ideas further.

I work with both sides of the investor/investee markets and find that intellectual property (IP) can be a tipping point around purchase and investment decisions. This is unsurprising given that intangible assets often make up over 90% of the value of a business.

Investee Considerations

Investees often do not understand the IP they have, nor how to showcase this in a way that investors can appreciate its value or most likely in the early stages its potential.

In an ideal world a business seeking investment has tailored itself and IP to be attractive to a particular class of investors. Practically, this is often not the case, and we must work with a less than ideal positioning. Regardless, when asked to contribute to a pitch deck or Information Memoranda, I have regard to how a target investor can benefit or get reassurance from the present and future intangible assets.

Key IP components can include:

a) Stage of project and what is needed to grow (marries timing of IP rights).
b) Market players size and IP position (shows relevance of our approach).
c) Competitive edge (must link to IP efforts).
d) Scalability of intangible assets.
e) Broad statement on what IP rights focused on and for what purpose.
f) Freedom to Operate considerations.
g) Other barriers to entry.
h) Engagement with an IP strategist.
i) Schedule of IP rights.
j) Commentary on scope of IP rights and relevance to market and investor.
k) Know how/trade secrets and the systems that keep these in-house.
l) Ownership of IP including considerations around external commissioning and copyright.
m) Marketing collateral and digital footprint.
n) Software/data and associated security.
o) Employment agreements.
p) Relationships – and controls around these.
q) Obligations – for example does a PhD student have to share IP with its University.
r) Key personnel and IP risks, succession planning.
s) Trade marks – may include how to build brand value.
t) Future IP rights – shows potential.

Sometimes the exercise of extracting the information for a presentation it becomes apparent that some work is required on the IP front to structure the investee – before pitching for investment.

The trick is being able to present the relevant information in a format that:

a) Does not overshadow the rest of the content in the presentation (1-2 pages maximum with IP schedule/portfolio at back of presentation).
b) Clearly shows relevance and value to the investment sought.
c) Is visually appealing.

Investor Considerations

An investor needs to feel comfortable that their investment will:

a) Be sustainable from a business perspective.
b) Not infringe any rights.
c) Is worth it and is scalable.

The IP components mentioned previously can all support these concerns.

Therefore, potential investors need to decide whether the IP components are presented in a way to give them confidence, or whether they need to do further due diligence on the IP aspect.

Unfortunately, due diligence can be an exhaustive, expensive, time consuming and a mind-numbing process. Also, valuation of IP can also be frustratingly vague – especially if a business is at an early stage.

This is where an investor needs to look at their appetite for risk balanced against the time and cost for investigating an IP position – and at what level.

And the investor needs to be able to communicate their requirements clearly to the professional providing the IP position or the professional can articulate the scope of their research (and associated risks) to the investor.

Personally, I enjoy conducting high level IP due diligence. Analysing a portfolio and distilling down any observations into a practical commentary and recommendations for an investor is highly satisfying. For example, anonymised advice from one of my investigations provided the following high-level commentary over a large IP portfolio.

a) Nothing came up that would kill investing or investigating further.
b) All information in the patent schedule provided appears correct.
c) Appropriate licences/assignment of the IP are in place.
d) All the XXX patents are due to expire in 20XX. The reason for this is XXX.
e) The implication of d) is that once these patents expire, competitors can produce what those patents covered.  Therefore, the newer patent applications and patents in the schedule are critical.
f) Further investigation/information should be sought to see the relevance of the newer patents to commercial products and whether there can be competitor workarounds.
g) Some of the patent applications are for XXX and not devices. This is unlikely to be considered patentable subject matter in the key markets of XXX.
h) Freedom to Operate (FTO) cannot be determined at high level assessment and is very expensive to conduct on an international level.
i) With an established business, it is highly possible that FTO has already been assessed. Check with the business.
j) The number of granted patents suggest that the patentee has something which could be used as a negotiating tool if FTO issues are raised.

This enabled the investor client to continue with the investment process at an acceptable level of risk to them – before they dove into the rabbit hole of full-on due diligence.


A happy marriage of innovators with investors can be more easily brought about if there is an understanding of what IP supports the business. This can be fast tracked through a clear presentation (such as in a pitch deck) or a high-level due diligence.

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