When most people think about the relationships between businesses, they probably think about wholesalers dealing with retailers, or vendors providing services to another business. Our South Florida readers may not realize it, but one of the most important points at issue when two companies interact – especially if one of the companies is a venture capital firm – is intellectual property.
However, the importance of intellectual property isn’t always at the forefront in the business community, even among those companies that owe everything – their popularity and their profits – to intellectual property. For instance, a recent article posed the question of whether or not venture capital firms even worry about intellectual property when such a company is contemplating a business relationship with another company. As the article noted, the resounding answer is that yes, indeed, venture capital firms do worry about intellectual property.
But, what might be one of the driving forces behind caring so much about a company’s intellectual property? The answer – potential intellectual property disputes. If a venture capital firm is going to join forces with an up-and-coming business, the firm will likely want to be reassured that all of the company’s pertinent intellectual property is registered and accounted for.
After all, business litigation can be a thorn in the side of an otherwise successful business model. Even if a company is seeing record profits, those profits can see significant cuts if funds need to be diverted to account for business litigation. Fortunately, this type of litigation can oftentimes be avoided when companies take the proper precautions as they grow.
Source: Forbes, “Do Venture Capitalists Care About Intellectual Property?,” Mary Juetten, Aug. 11, 2015