Few tasks strike more fear in the hearts of new founders than the IP strategy slide in their investor pitch deck. It can be confusing, it can be opaque and it can be difficult to determine exactly what investors expect from you in this area.

It’s often one of those topics that founders have to learn on the fly.

That’s the bad news. The good news is that investors aren’t looking for perfection in your pitch deck. They’re not looking for patent application filing dates and figure around competitive IP or anything like that. They just want to see your IP thought process. They want to know that you’ve been thinking about your innovation from an intellectual property perspective and have a plan in place to take those steps when the time is right.

[The 10 IP Questions You’ll Get Asked When Fundraising]

With that in mind, here are the items you should be sure to address on your IP strategy slide.

Where are you headed with your IP strategy?

Like I said, they just want to know that you’ve thought about your IP and have a strategy to protect it. Even if the answer at this stage is “we’re not going to file for any IP official IP protection, but instead we’re going to put everything under lock and key as trade secret so that no one will ever see it outside of the actual product.” That is a totally valid IP strategy depending on your context. Sharing your thought process behind that decision is what matters.

How are you planning to protect your competitive edge? 

Maybe you’re an industry veteran who already had a ton of contacts in your industry before you started your company. In that case, your Rolodex is a very valuable trade secret for you because it connects directly to your potential customers and is something you’d want to protect. IP is not simply a question of protecting your product, but it also has to do with protecting your competitive edge as a business overall from every possible angle.

How are you mitigating risk?

In business, as in life, risk often comes down to people. At most startups there are many different people involved in the process, both internal at the company and with outside vendors, so it’s important to think through and communicate how you as a founder are engaging with all of these people. Do you have processes in place to ensure that all your employees understand the confidential nature of certain types of information that they have access to? 

And there are many more risks to consider: 

  • Do you protect company documents on an internal server or limit access to only via VPN?
  • When an employee decides to leave your company, do you have procedures in place to make sure that they’re not taking your valuable intellectual property with them? 
  • It’s the same thing with consultants and vendors. When you pay somebody to do work for you, do you own their work product?
  • When hiring an employee from a competitor, are you making sure that they aren’t bringing any IP baggage from their former employer?

Your potential investors will want to know that you have your eyes open to all of these potential risks. You don’t want to be caught unaware when your competitors start suing you or sending you cease and desist letters or, worst of all, file patents that impact your new product. All of these types of risks can be mitigated, and you will want to be able to address your strategy to do so when an investor asks about them.

See, the IP strategy slide doesn’t have to be scary. It just has to demonstrate a clear understanding of the intellectual property you’re building, the value it contains and how you’re planning to protect that advantage going forward.