An Investor's view of Intellectual Property

An Investor’s view of IP Edward French, 19th November 2008

Contents • Background • Making money in IP • The value in IP • Costs in IP • Selling IP 2

Enterprise Ventures Fund Manager Funds 3x Technology Dev Cap Funds Lancashire Funds: ~£40m £10->25m Small Business £100k-£1.4m £100k-£2m £10k-£300k 3

Our experience • Backed over 40 IP-based companies Pen computing Social mobile game • Ranging from software...webservices...materials EDA tools science... Etc. Diagnostic webservice • More than half have filed patents... Rest Mobile phone UI copyright, designright, registered design. Enterprise Mashups E-learning • Licensed dozens of technologies E-tail – Tried to license dozens more! 4

Making Money in IP Recipe for riches: 1. You can do some cool work 2. You generate some strong IP that has value 3. You sell this value to a “LargeCo” and they pay you enough to cover your costs and make a nice profit for the risk. 4. Retire somewhere sunny 5

Value in IP • Why do large companies acquire IP ? 1. Because the patent means they need your permission 6

Value in IP • Why do large companies acquire IP ? – Because they’re worried you’ll sue them – Because they couldn’t have built it themselves without- applies to stuff that’s hard more than clever – Because they can use it as a weapon against competitors- important only in an IP landscape – Because it comes with other things.....? 7

Value in IP IP Ranking Patent on a process for making sunscreen more cheaply New logo design for a beverage company A web 2.0 site with 100,000 registered users A more beautiful and practical arrangement of a mobile phone protected with a registered design A recipe for a common beverage 8

How valuable is a patent? 4,000,000 patents 9

Costs in IP • Worldwide patents £x00,000 • Software patents/Business method patents – cheaper- but US only • Other stuff is helpful • Advice is patchy 10

Selling IP • Trick is not to! Not this... But this... Technology Reference design including the technology Idea Product Website concept User-base 11

Conclusion • IP on its own usually has little value • Venture investors care about IP: but the good ones care mainly about the IP story and how it could drive exit • IP shouldn’t run strategy, but you need an IP Strategy • Learn more: http://tinyurl.com/hyphen3 & http://techgain.net 12

Contact Details Edward French Email Edward.french@enterprise- ventures.co.uk Phone 07966 347407 Yuuguu ID edwardmfrench@gmail.com Website www.rsgf.co.uk Blog techgain.net 13

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An Investor's view of Intellectual Property

by edfrench on Nov 19, 2008

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An Investor’s view of Intellectual Property — Presentation Transcript