PUBLISHED 6 SEPTEMBER 2026
By Dr Ritchie Lewis Daniel, Chartered Patent Attorney and European Patent Attorney
For many technology businesses, intellectual property forms part of a wider discussion about growth, investment readiness and commercial value. Investors may consider intellectual property during due diligence, but the relevance of IP will depend on the business, the technology, the market and the investment opportunity.
Strong intellectual property does not automatically attract investment, and investment decisions are rarely based on IP alone. However, ownership, protection strategy and governance can influence how investors assess a business.
Why investors may care about intellectual property
Intellectual property can help demonstrate how a business creates, protects and develops value. Depending on the sector, investors may consider whether the business has identified important intellectual property assets and whether those assets are appropriately managed.
For technology businesses, intellectual property may relate to products, processes, software, data, brands, confidential know-how or combinations of these. Investors may therefore be interested in how the business identifies and manages those assets over time.
IP as part of a wider picture
Intellectual property is generally one factor among many. Commercial traction, market opportunity, technical capability, management strength, product development and financial performance may all be relevant.
Businesses should therefore avoid treating intellectual property as a substitute for commercial progress. The more useful perspective is how intellectual property supports the wider business strategy.
Ownership and entitlement
Ownership is often an important issue during due diligence. Investors may wish to understand whether key intellectual property is owned by the business and whether appropriate assignments and agreements are in place.
Founder-created technology, contractor-developed software, university research and collaborative projects can raise ownership questions. Clear documentation may help reduce uncertainty and make the position easier to explain.
Patents and pending applications
Patents and patent applications may be relevant where a business is developing technical innovations. Investors may be interested in what has been filed, why each application has been filed and how the filing strategy supports the commercial plan.
A pending application is not equivalent to a granted patent. Its relevance will depend on factors including the technology, the disclosure, prosecution outcomes and commercial objectives. A measured explanation is generally more informative than broad claims about what an application will achieve.
See the RIDAN IP overview of patents as an intellectual property right and patent services for innovative businesses.
Trade marks and brand protection
Brands can be valuable business assets. Investors may consider whether key names, product brands and trading identities are appropriately protected and consistently used.
Trade mark registrations are not equally important for every business at every stage, but they may provide greater clarity around ownership of branding assets. See the RIDAN IP overview of trade marks.
Trade secrets and confidential know-how
Not all valuable intellectual property is registered. Confidential know-how, technical data, algorithms, manufacturing methods and business processes may contribute to competitive advantage.
Investors may therefore take an interest in how confidential information is identified, protected and shared within the organisation. See the RIDAN IP overview of trade secrets and trade secret support.
Freedom to operate considerations
In some sectors, investors may wish to understand how the company thinks about third-party intellectual property rights. This is sometimes described as freedom to operate.
The objective is not necessarily absolute certainty. Rather, investors may be interested in whether relevant issues have been identified and considered in a manner proportionate to the stage and activities of the business.
Record keeping and governance
Good record keeping can support future investment discussions. Relevant material may include invention records, assignments, employment terms, contractor arrangements, licences and confidentiality procedures.
Governance does not need to be unnecessarily complicated. Proportionate processes may provide greater confidence than informal arrangements and can help the business respond efficiently when information is requested.
IP and due diligence
Due diligence commonly involves reviewing documents, ownership arrangements and protection strategies. The scope varies depending on the transaction, sector and maturity of the business.
Businesses that maintain organised records are often better placed to respond to due diligence requests and explain how the intellectual property position relates to current products and future plans.
What investors may be concerned about
Questions may arise where ownership is unclear, key agreements are missing, disclosures are poorly documented or protection strategies appear disconnected from commercial objectives.
These issues do not necessarily prevent investment. Investors may, however, seek additional information to understand the position and any practical steps being taken.
Practical steps for startups and SMEs
- Identify key intellectual property. Consider technology, software, brands, content, data and confidential know-how.
- Review ownership arrangements. Check founder, employee, contractor, university and collaboration positions.
- Maintain appropriate records. Keep relevant filings, agreements, licences and disclosure records organised.
- Connect IP decisions to business objectives. Be able to explain why protection has or has not been pursued.
- Consider registered and unregistered rights. Valuable IP may extend beyond patents and formal registrations.
- Review the strategy as the business develops. Products, markets, personnel and investment plans may change the appropriate approach.
Frequently asked questions
Do investors expect patents?
No general rule applies. The relevance of patents depends on the business, technology, sector and commercial model.
Are pending patent applications valuable?
They may be relevant, but should be considered in context rather than viewed as guarantees of future protection or commercial value.
Can trade secrets be important?
Yes. Confidential know-how can be valuable where the information has commercial significance and confidentiality can be managed appropriately.
What if the business has no patents?
Many businesses operate without patents. Intellectual property may take other forms, and the relevance of patent protection depends on the technology and business model.
Should a startup file patents solely for fundraising?
Filing decisions are generally stronger when linked to commercial objectives rather than fundraising activity alone.
Does IP matter outside deep-tech businesses?
Potentially. Brands, software, content, know-how and confidential information may all be relevant intellectual property assets.
Conclusion
Investors may consider intellectual property as part of a wider assessment of a business. Ownership, governance, protection strategy and commercial alignment can all contribute to that discussion.
The stronger position is often one where intellectual property decisions support the broader objectives of the business rather than existing in isolation.
General information only. This article does not constitute legal advice. Intellectual property strategies should be considered in light of the relevant technology, business objectives and circumstances.