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Patents make the difference

for Startups
Benefits of patents for Startups

Obtaining patents is expensive and time-consuming, but they provide the best protection to your innovation. Patents provide their holders with an exclusive right to make, use or sell an invention. They prevent competitors from making or selling your invention, irrespective of whether they copied your invention or knew of your patents beforehand.


The reward versus cost of patenting is very favourable for start-ups.

Patents have been the basis for some of the tech world’s most successful companies.

VCs love patents


Patents are Start-up’s Real Property Value

= more than 50% of Deep-tech start-up pre-money Value


  • As a startuper you must eventually look for more funding to proceed with your projects, or to grow your customer base. After you will have maxed out all your crowd-sourcing funds, whom will you turn to? You will likely end up seeking funding from a venture capital firm (VC).

  • When you are an early stage start-upper, then your start-up still lives in a virtual world.

  • But VCs, and their investors, like everyone else, live and pay bills in the real world.

  • Naturally, VCs care about your company’s valuation. It is hard to separate facts from fiction.

  • Patents are real property in a virtual world because they have a multiplier effect. 

  • Being your company’s main tangible assets, Patents can encompass up to 90% of the company’s value.

  • They allow your start-up to “punch” above its weight and compete with the big-time tech players.

Hedging VCs against a company’s bad scenario

If everything works out, and your Start-up becomes the next tech unicorn - great! Your VC investors will make a ton of money, you will make a ton of money, and everyone is happy. But what happens if it does not work out?

  • The first bad scenario where a patent can help is when a start-up ultimately fails. Great idea, great technology - but no market traction. Maybe it was too much of a first mover. Maybe the market was not ready. Who knows? But now the VC has lost money. What can you and the VC do?

  • Here is where patents can help. A patent is a property - just like computers, office furniture, though of much higher and more durable value. In fact, some companies are bought mainly for their patents.

  • Patents are a Hedge. When a start-up fails, it can still sell its patents for some salvage value to a competitor to recoup its losses, and a part or the VCs’ investment.

Facilitating venture capital investment

VCs like to see not only innovation but also confidence in novelty as well, which demonstrates that the innovation has real potential and value.

  • Patents increase your chances to sell, merge or IPO a company.

  • Patents incentivize investors

  • In the last 20 years in Europe, more than 67% of venture-backed start-ups able to secure investments were those where patents played a major role.

  • 80% of start-ups having received more than € 5 million venture capital investment already owned patents.

Hedging VCs against the company’s rivals

Patents make a great defence for two reasons:

  • First, patents mean that your start-up will protect its great ideas against the big competitors. Without patents, your start-up has no defence.

  • Secondly, if a big competitor tries to bully your start-up with its own patents, your start-up can defend itself by counterattacking with the patents it already owns. If your start-up has patents, you at least have a seat at the table. Without patents, you have nothing to (legally) stand on.


To sum up, your funding is contingent upon your start-up’s valuation—and your start-up’s valuation is contingent upon your start-up’s potential market value. Patents provide an extra guarantee that your start-up can own its own market, and defend that market, even against the largest competitors.

Boosting the VCs expected exit value of the company

A VC can have a much better return on its investment - and the start-up can have a bigger exit - by selling it to a big competitor.

  • Patents increase the company’s value to a competitor by blocking off an area of the market, as well as technology. 

  • In this instance, the fear of missing out will make that big competitors will pay way more money for a patent-protected start-up, to avoid getting locked out of a market niche.

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