Why are startups with patents and trademarks 10 times more likely to get funding?

The impressive growth of the startup ecosystem in Europe in recent years has significantly boosted the continent’s economy, and they are increasingly seen as drivers of economic growth. These startups have strong potential to address the most important challenges Europe faces in terms of digitisation, sustainability and industrial competitiveness, through innovation.

Despite this expansion, Europe still faces considerable difficulties in facilitating access to financial resources for startups. In order to better understand this problem, a study has been carried out that examines the role of Intellectual Property rights, especially patents and trademarks, in the access to finance for European startups.

According to the research results, 29% of European startups have filed for IP rights registration. As these companies grow, they are increasingly using patent and trademark registration at all stages of development, particularly in the biotechnology sector, where almost half of the startups apply for these rights.

How does it affect Startups in the Deep Tech sectors?

There is research that associates a higher probability of receiving venture capital funding for start-ups, especially in deep tech sectors that require more investment.

For startups that applied for trademarks, a 4.3 times higher probability of funding was observed, and for those that applied for patents, a 6.4 times higher probability of funding was observed.

This is because startups with patents and/or trademarks are perceived as more profitable to investors in the equity exit phase, which increases the likelihood of a successful exit through an IPO or acquisition by venture capital firms.

If you have any doubts about this subject, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.