5 Things to Say About Patents In Your Pitch Deck to Impress Potential Investors
Startups that want investors must do everything they can to show potential investors a clear path to high returns. One way to do that is by showing investors the value of your patent portfolio.
Here are 5 things you should put in your pitch deck to show value to potential investors!
The number of patents you’ve been awarded.The number of patents you've been awarded is important because it tells your potential investors that you’re building a patent portfolio (i.e., a collection of patents) around your core technology.
Patent portfolios are better than individual patents because individual patents are usually narrowly-issued, meaning they tend to only prevent competitors from implementing a very specific feature or doing things in a very specific way. Individual patents are often easy to design around. They typically won’t stop your competitors from releasing a competing product altogether.
Patent portfolios, on the other hand, put up so many small barriers that become an order of magnitude harder for your competitors to avoid. Under the right circumstances, your competitors could start to question whether it even makes sense to compete in your market.
Your potential investors will appreciate you having a patent portfolio much more than you having a single patent.
The number of patent applications you have pending.This number is important because it tells your potential investors that the value of your patent portfolio will likely increase as those patent applications get through the examination process. Plus, many investors know that a pending patent application can result in multiple patents.
Under the right circumstances, patent applications can be used to target competing products. Many investors know that, which is why they like to see when startups have a good number of pending patent applications.
You can't say your invention is “patented” until a patent is awarded. Many pitch decks improperly identify technology as "patented" simply because a patent application has been filed. The proper term to use at that stage is “patent pending.”
The short-term value of your patent portfolio.Patents are not a liquid asset. Appreciating their value can be difficult. Therefore, it's helpful to tell your investors how much you think your patent portfolio will be worth in 12-months. In other words, be very explicit about how your patent portfolio will increase your valuation (i.e., how you're using their money to make money)!
The long-term value of your patent portfolio.It’s probably easier for you to build a multi-million dollar patent portfolio around your core technology than you think. Imagine telling your investors you are on a path to increase the value of your business by millions of dollars through your patent portfolio alone!
Telling your investors how much your target patent portfolio will be worth on the day of your exit will help them see the return they’ll get by investing in your company.
Our Patent Planning Tool (see the link below) can help you estimate the short- and long-term values of your patent portfolio! You'll have a good answer when investors ask how you arrived at your valuations.
What your competitor’s can’t do.As mentioned above, patents are usually issued on narrow grounds. It's important to tell your investors exactly what it is that your competitor's can't do because of your patent. The list of advantages you have over your competitors becomes much more significant as you build a patent portfolio.
One option is to prepare a side-by-side comparison listing the features of your product and your competitor's product, highlighting the features you have patented that they can’t copy. Take it one step further by explaining why customers will pick your product over theirs (and maybe even pay a premium).