5 Things Small Business Investors Need to Know about “IP”
The Wall Street Journal’s Small Business Blog featured recently a guest column by Antone Johnson on the use, misuse, and misvaluation of intellectual property. Â It’s probably of interest to valuators and financial consultants who are working with small business owners to value and growth their businesses. Â
Venture capitalists, angel investors and start-up lawyers these days tend to be obsessed with “intellectual property,” or IP.
And for good reason: In the information economy, the core assets of a new venture are likely to be talented people, the IP they create, and little else.
To maximize future value, founders should try to lay a solid IP foundation even before a new start-up is incorporated.Â
Be Sure You Protect and Value Your Unique Competitive Edge
Johnson,Â who is a lawyer for start-up technology and media entrepreneurs and investors, and previously was vice-president for legal affairs at eHarmony Inc., says there are five common mistakes to avoid about intellectual property. Â He labels them:
2. Mixing up what came from where.
3. Planning to launch a business around a clever, catchy brand name that can’t be used.
4. Confusing types of IP and means of protection.
5. Overvaluing patents.
Â . . . and provides good detail on how these mistakes happen how business owners can avoid them. Â Â (For instance, in “Confusing types of IP and means of protection, he distinguishes the role and limits of trademark, copyright, patents, and trade secrets from intellectual property. Â Check out the full article here.Â
See our earlier piece Â referencingÂ NPR’s Â This American LifeÂ podcast on “Patent Trolls,” which also takes note of a pieceÂ inÂ The AdvertiserÂ claiming Apple’s “Bogus Patents” will “Strangle Android.”Â