The ever-increasing speed at which information travels over social media and the expanding volume of information available on the internet has helped and hindered small and start-up enterprises. It is easier to get recognition through social media but that recognition does not always translate into revenue. Likewise, it is easier to find information but the reliability of the information can be suspect. All of this matters because long-term business success is often the result of the access to funds for the next phase of research, marketing and expansion. The concern here is the strategy for financing that next phase, whether classic bank borrowing, bringing on investors or a private financing source as part of an exit strategy for cashing out.

Any effort to finance, whether through traditional banks, investor or private equity funds will ultimately turn on questions of what makes your business model unique and what protection do you have for that uniqueness. These questions will surface as part of the due diligence to determine market survivability and, in the event the business does not survive what security is there for the requested financing. The answer to what makes the business unique may be easy or self-evident. What protects the uniqueness of the business model may be more difficult to answer and its answer may depend to a large degree on the action taken years before the question was asked. The best answer may be the business entity’s intellectual property portfolio (IP). An IP portfolio can have a varied combination of copyrights, trademarks, trade secrets, confidential information and patents. There is no set formula for what should be in an IP portfolio or the ratio of different IP rights in a respective portfolio.

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