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Navigating Investment Opportunities: Intellectual Property and the Impact on Financing.



Intellectual Property (IP) rights are important throughout the entire life-cycle of business, to secure and maintain exclusivity in your innovative value. From ideation right through to commercialisation, the value generated by innovation process is crystallised in intangible assets, from patents to trade marks, industrial designs, and copyright. The durability, robustness and territorial breadth of these assets are key factors in obtaining resources and in eventually capturing the maximum value.


Playing your intellectual property cards right can be crucial, to thrive in the fragile stages of starting-up and the fight for survival. For companies like Binarii Labs, Overcast HQ, Awakn Life Sciences, and Poolbeg Pharma PLC, their awareness of the value of their intellectual property portfolios helps them demonstrate their potential for growth and has made them highly attractive to investors. Let’s look at what lessons we can learn!



Early-Stage Opportunities


In the earliest stages of the innovation journey, before patent applications can be finalised, one option for the founder of a high-potential start-up is to maintain their idea as a closely-guarded trade secret. Angel Investors, typically experienced professionals in their industry, who understand the potential value of the problem to be solved. Accordingly, they may be willing to support research and bring a project to the point where an initial patent filing strategy can be executed. In the case of Overcast HQ, CEO Phillipe Brodeur having a proven media industry track record certainly assisted in securing impressive funding at an early stage.  As an IP attorney, I would highlight the importance of maintaining strict confidentiality prior to patent applications. In my experience, having a clear, commercially-viable vision, and a sensible set of key brand assets at this early stage may help with establishing credibility with such investors. 


The early filing of patents and trademarks, especially in the seed or early growth stage is clearly associated with a higher likelihood of achieving subsequent Venture Capital funding. The EUIPO and EPO produced research in October 2023 which showed a 4.3 times higher likelihood of funding for start-ups that filed trade marks, and a 6.4 times higher likelihood of funding for start-ups that filed patents. Start-ups that secured multiple IP rights performed even better. The same study showed that obtaining IP rights also shows a string correlation to successful exits for investors. The highest likelihood of Initial Public Offering (IPO) or high-value acquisition was observed for start-ups that filed both patents and trademarks.


 

IP in R&D-intensive industries: Deep-Tech, Biotechnology and Pharmaceuticals


To look at some examples, Binarii Labs secured funding by patenting novel data security solutions. The company's innovative BinariiDSP, use blockchain, distributed ledger technology, and artificial intelligence to provide secure data management and sharing. This unique approach has attracted significant investment, including €400,000 from Enterprise Ireland's High Potential Start-Up fund, contributing to a total of €3 million raised. The patented technology has been instrumental in demonstrating Binarii Labs' value and potential to investors, facilitating its global market expansion and job creation plans.


Biotechnology is by far the most IP-intensive sector for start-ups, with nearly half new businesses seeking early-stage patents and trademarks. Awakn Life Sciences' mission is to develop innovative and effective treatments for addiction and other mental health disorders. The company focuses on blending therapeutics with breakthrough effects, particularly for Alcohol Use Disorder, and it has recently entered an important licensing deal, which will help to fund its research and development pipeline across multiple channels.


Poolbeg Pharma PLC has been actively expanding its comprehensive global intellectual property portfolio. The company holds patents for protein kinase inhibitors, including POLB 001, which are used across various disease indications. Recent developments include the granting of an important US patent. This enhances the attractiveness of POLB 001 to potential pharmaceutical partners. Poolbeg is also pursuing additional patents, particularly in oncology and other new disease areas. 


Regular review of the IP portfolio is critical to ensuring it stays fit for purpose, by progressing in lock-step with the business’ commercial ambitions. Not only does that refer to obtaining patent protection, but it may also include licensing-in technologies and entering commercial arrangements with third parties.


 

The Importance of Communication 


Across the board, our panellists will speak about the importance of managing IP-related communication effectively. From deliberately maintaining secrecy, to publicly building their brand, the keys to leveraging the value in your IP effectively are controlling the timing of disclosures and ensuring clarity and consistency in communicating the value.


Explaining how a novel solution will work can be challenging – something that doesn’t exist yet can be tricky to imagine. Harnessing the imagination can include giving very succinct brand messages and instilling a sense of the company’s ingenuity and potential value into key brand symbolism.  


Brands acquiring a value in such identifiers is a key intangible asset consideration for any start-up. Any robust IP strategy should include the timely securing of trade marks to protect the important brand assets - such as business’ name, key product names, and other symbols such as logos. Filing applications and securing IP rights is only the beginning of the brand protection journey, and a plan and budget for enforcement are vital to maintaining (and growing) the future value of the company’s IP rights.


 

The Opportunities for Irish Business


The Local Enterprise Office network and Enterprise Ireland, and various European Commission initiatives, offer various supports and grants to help companies in Ireland develop and implement effective IP strategies.


 

Take Control of Your IP!


Owning robust IP rights – and being able to communicate their value - are critical to the ability of most start-up companies to raise vital funds.  This is nowhere more apparent than in the deep-tech and life sciences industries, where higher capital needs mean every round of funding is a fight for survival.


 


Mary White, Director of Stobbs Ireland, will lead a discussion with four incredible panellists at the Dublin IP and R&D Summit 4.0, Navigating Investment Opportunities: Intellectual Property and the Impact on Financing.



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