10 IP And Commercial Contract Loose Ends To Tie Up Before You Approach Investors

10 IP And Commercial Contract Loose Ends To Tie Up Before You Approach Investors

Investors poured unprecedented sums of money into businesses last year, but recent geopolitical events, an expected rise in interest rates, and other reasons are causing venture capital investment to halt. Intellectual property assets have grown in value since the epidemic began, and they are rapidly becoming a focus for investors eager to spend their dry powder. Having your intellectual property and commercial contracts in place might help you get funding faster.

Waiting to address these concerns during financing might result in delays, time-consuming and costly repair, and, in the worst-case scenario, reduced values. The following is a list of ten intellectual property and commercial sectors that investors consider during due diligence, as well as strategies that companies may take to better prepare for these concerns. Ascertain that previous employers are unable to claim ownership of intellectual property.

Investors are especially worried when startups hold their intellectual property alone. When a founder moonlights on their new firm while working for another company, especially if the prior employer offers a rival product or service, this exclusive ownership is sometimes jeopardized. The greatest technique for protecting your intellectual property is to apply for federal protection as soon as feasible.

After terminating all previous jobs, a founder should start working on their business. They should make sure that they don’t start working on their new product or company on their old employer’s time, utilizing its equipment, client lists, or secret information, and record it if feasible. When beginning a new firm and recruiting former coworkers or vendors, founders should carefully check any non-complete and non-solicitation terms. If a founder is creating a product or service that will compete with their previous company, they should thoroughly record the development process and even adopt a clean-room software development technique to verify that the product or service was developed independently of their former employer. Employees and contractors’ IP should be documented.

The mere fact that a person is employed by a corporation is usually inadequate to ensure that any IP created by the employee is protected. Having all employees, advisers, contractors, interns, and other entities sign formal confidentiality and invention assignment agreements is one of the simplest methods for businesses to safeguard their intellectual property. Despite the fact that these agreements are often short and easy contracts with little negotiation, corporations frequently fail to get them, leaving them without critical portions of their IP.