Bodacious Secret No. 3: Protect Investors 🔥
Across the world, business has been good. The past twelve months delivered a banner year for investment, merger, and acquisition deal flow. The economy, buoyed by market gains, has helped fuel investment in early-stage companies.
While some business owners may choose to operate as lifestyle businesses or even decide to pass the company down through the generations, there are plenty of businesses hoping for an investor or buyer.
Here are a few things to consider to help you get the best deal at the best price.
Protect Company Brands
Take steps to protect company brands. If a company does national business, the company should consider registering company trademarks at the U.S. Patent and Trademark Office. U.S. registered marks are presumed valid and can be a powerful tool in building a strong brand. When companies don't take steps to register company brands which are core to the business, a lot of value is left in question- meaning, a national brand can be left with less than national brand-protection.
Own Company Innovations
Owning company innovations may be a little more complicated than you might think. Many companies operate teams using a variety of structures- for example by use of contractors, W-2 employees, temps, external business collaborations, etc. And many companies don’t give much thought to who legally owns the creative output of the team. Many business owners never require employment or consulting agreements, and in many instances, the company finds out (too late) that it doesn’t own the innovation. When investors find out companies don’t own the innovations they are believed to have owned, the investor usually walks away (and takes their money with them).
Manage Infringement Risk
Every operating company entertains the risk of infringing another company’s band, design, products, or creative. So, companies should be diligent about investigating infringement risk before any product launch. In most investment or acquisition processes, companies are often asked if the company has ever received a cease and desist letter or been the subject of litigation. As the target company, if you can show you are careful about launching brands and products, and that you routinely seek the legal advice of an attorney you’ll be much better off. I’ve worked on many deals where the offer price was significantly discounted when patent, trademark, or copyright infringement risk was uncovered.
If you want an investor this year (or at any time), then start now getting your business investor-ready. If you can begin now to think about strengthening your company’s bargaining position through strong product, brand, and design protection, you will be much better off.
About this Series
Bodacious a legal information series related to intellectual property and technology law issues, such as patents, trademarks, copyrights, privacy, business formation, and litigation law issues. The information in this post focuses on the 9 Legal Secrets Every Entrepreneur Should Know To Have A More Bodacious Business.
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Angela Grayson is the Principal and Founder of Precipice IP, PLLC. She practices before the U.S. Patent and Trademark Office and is a registered patent attorney. Ms. Grayson is licensed to practice before the Mississippi Supreme Court and is admitted to the Court of Appeals for the Federal Circuit and the U.S. Supreme Court Bar. Contact Angela Grayson @ 479.259.2966 or 601.427.4773.