Technology Start-up Entrepreneurs and CEO’s: If Your Goal is Investment or Acquisition by a Big Company, You are Probably Patenting the Wrong Things

If you want to be acquired, you need to patent in the right direction

If you want to be acquired, you need to patent in the right direction

Do you treat your patents as a fence or a tollbooth? If you wish for your start-up technology company to obtain investment from or acquisition by a bigger player, you had better understand the difference.

Most start-up technology company entrepreneurs and CEO’s understand that patents can be key to establishing the value of a new business idea. Typically, entrepreneurs and CEO’s such as yourself will engage patent attorneys to build an IP portfolio that protects the start-up’s technology and products to the fullest extent possible. The motivation for this effort and expense is, of course, to to protect your start-up’s idea from use by others. As management of a start-up you may be seeking to build an ongoing business around the patented technology, but often the goal of building a solid patent portfolio is to make your business an attractive target for investment or acquisition by a larger company.

As an intellectual property and business strategist (more info here: http://www.jackiehutter.com/), I believe that such an inwardly focused patenting strategy is a misguided approach for companies that wish to obtain investment from or be acquired by larger companies. Why do I think this? Let me use a simple analogy.

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