Building Patent Assets for Startups & SMEs
By Rahul Bagga While not all workable ideas are patentable but not all workable ideas need to be as great as invention of airplane or rocket for them to be patentable. Most patents
Investors are the best friends, mentors, guides, advisers, course-correctors of a private company as their interests are aligned with the success of the startup/SME they are invested in. We get that. We also get that at times relationships are spoiled and mostly due to overarching and unfriendly shareholders' agreements and related investment contracts and this comes up when the investee entity is going through a rough patch. We believe balanced approach is possible and which is why all our shareholders' agreements are bespoke - specifically drawn on basis of investment terms and the industry/tech space the investee is operating in.
Investors need to balance or minimise their risk, especially on errors done on part of founders and their team, and this is achieved via establishing a sound corporate governance strategy - the one that isn't too tight that it suffocates the founders and the one that is neither too lose that it allows founders to spend money with impunity. We not only ensure meeting of minds but also provide bespoke investment contracts.
We have observed several times that a term sheet is often different from what is verbally agreed upon and an SSHA is even different than or steers away from the terms of signed term sheets. This is because of template-based approach being used across this industry. We work only bespoke contracts - specific to an investment at hand and technology/business of the investee company and the unique situations that are formed around each investment.
Our due diligence is deep dive and well-rounded for we also cover an in-depth due diligence of intellectual property rights and their position in an investee/target company and our engineering/technology backgrounds put us in rather better position to provide a preliminary technology due diligence as well.
It is possible that investors for no fault of theirs end up signing contracts with founders that take away freedom of the founders and then a lot is left at chance. We ensure win-win negotiations and agreements.