IP Checklist for Startups: Before the Funding Round

In early-stage companies IP is the item postponed until the product ships. The cost of postponing arrives late: the gaps surface during diligence in the first funding round, when fixing them is expensive and weakens your negotiating position.

Ownership: is everything actually in the company?

• Code written before incorporation belongs to whoever wrote it unless assigned in writing — the most common gap of all.
• Marks registered in a founder’s personal name conflict with the post-investment cap table.
• Domains and social accounts opened on personal emails become leverage in a founder dispute.
• Paying a contractor’s invoice does not transfer rights; a written assignment is required.
• R&D companies need an employee invention process, not just a clause.

The brand

• Has a clearance search been run before launch?
• Is the application filed in the right classes — product and service alike for most software businesses?
• Is there a plan for target markets, using the six-month priority window?
• Is watching in place? The two-month opposition window runs regardless.

Technology: patent or secret?

Not every startup needs a patent. The question is whether the innovation can be understood from the product. If it can, a patent is valuable; if it runs on your servers, secrecy may serve better. If you are considering a patent, file before you present — demo days and press releases can destroy novelty.

Minimum package before a round

• At least one trademark application in the company name.
• IP assignment and confidentiality undertakings from all founders and staff.
• Assignment clauses in agency and contractor agreements.
• Domains and digital assets registered to the company.
• An open source component inventory.

Talk to us about a pre-round IP review.

General information only, not legal advice.