Strengthening Your Company’s IP Position Before Raising Capital: How IP Counsel Can AssistSeptember 22, 2026

For many emerging and technology-driven companies, intellectual property (IP) assets make up a significant portion of the value investors are being asked to fund. Yet companies frequently wait too long to seek assistance from patent counsel, who some may view as having services limited to obtaining patents. In a capital-raising environment, the role can be broader. Involving IP counsel before investor diligence begins is the winning strategy to ensure your IP portfolio holds up to investor scrutiny.

A best practice approach is to involve patent counsel before a capital raise is underway. Patent counsel can identify issues that savvy investors are likely to examine, address correctable problems in advance, and present the company’s IP portfolio in a way that accurately reflects its commercial significance. The following are examples of value-add patent counsel can provide before a capital raise is underway.

1. Confirming the Company Owns the IP

The first question in almost any IP diligence review is deceptively simple: Does the company own the IP without restraints? For an established company, that answer may be straightforward. For a startup or rapidly growing company, ownership can be considerably more complicated.

For example, inventions may have been developed by founders before the company was formed. Consultants, independent contractors, university researchers, former employees, or development partners may have contributed to an invention. Patent applications may have been filed before assignments were completed, or assignments may not have been properly recorded. These issues are often correctable when identified early. However, they can become disruptive issues if discovered by an investor during diligence.

This is why it is routine for patent counsel to review and validate chain of title and ownership for patent assets. The goal is not merely a clean USPTO record. Investors expect to see a clean chain of title from inventors to the company.

2. Demonstrating a Patent Portfolio that Protects the Business

Sometimes investors want to see big numbers of IP filings. However, a large patent portfolio is not necessarily a valuable patent portfolio. This is why key strategic investors may be less interested in the number of patents than in what those patents protect. The more important questions include: Do patent claims cover the company’s core products? Are there important technical differentiators from closest state of the art? Are future products likely to be covered by the company’s patents?

This is where patent counsel can provide value beyond routine prosecution. Before fundraising begins, patent counsel can map patent claims against its current products and product pipeline. Demonstrating there are no gaps between early patent applications for the company’s original technology compared to the evolution of commercial products provides an opportunity to demonstrate existence of a robust and strategy IP portfolio.

This type of involvement from patent counsel provides management the ability to explain that the company not only “has patents,” but more importantly what competitive territory those patents are intended to protect.

3. Distinguishing between Patent Protection and Freedom to Operate

Another recurring issue in investor discussions is the tendency to equate owning patents with having freedom to operate (FTO). They are different questions. A patent may provide the right to exclude others from practicing a claimed invention. However, it does not, by itself, establish that the patent owner can commercialize a product without potentially infringing a third party’s patent. This distinction is particularly important in crowded technology fields.

Documents for investors’ review should be extremely careful not to make unsubstantiated broad statements such as “we have freedom to operate” unless an appropriate analysis supports that conclusion. Patent counsel can guide management on how to frame FTO conclusions based on what work has been conducted, what it covered, and how the results can be characterized.

IP counsel can help management distinguish between these related yet separate issues, in order to accurately characterize the company’s patents while building credibility with investors:

• what the company’s patents protect;
• what third-party patent risks have been evaluated; and
• what additional analysis is planned as the company approaches commercialization, or commercializes future products.

4. Coordinating Patent Filing Strategy with Fundraising Disclosures

Raising capital often requires significant disclosure about the company’s assets and IP strategy. Companies often prepare pitch decks, conduct investor meetings, present technical demonstrations, update websites, or disclose detailed product information to prospective strategic partners. Such communications can create patent issues if they occur before important inventions have been adequately protected. Therefore, attention should be paid to the timing of fundraising disclosures.

U.S. patent law provides certain protections for inventor-originated disclosures, but companies pursuing international patent rights should be particularly cautious about assuming that a U.S. grace period will preserve rights in other countries. The practical solution is coordination.

Before a financing campaign, patent counsel should understand what technology the company expects to disclose publicly or semi-publicly and determine whether additional patent filings should occur first. This is consistent with the need to discuss with patent counsel before a product demonstration, conference disclosure, or investor roadshow. However, companies often overlook the potential risk for disclosures associated with fundraising and too broadly rely upon non-disclosure agreements in place between the parties.

5. Identifying Licenses and Other IP Encumbrances Early

The ownership of patents (see item 1) is only part of the diligence analysis. A company may own its patents, but still be subject to contractual or legal restrictions impacting their value. Those can arise from licenses, joint development agreements, government funding, prior financing transactions, security interests, collaboration agreements, field-of-use restrictions, or obligations owed to third parties for any number of reasons.

For example, an exclusive license may contain sublicensing restrictions. A development agreement may grant another party rights to improvements and/or have milestone payments or royalty obligations. Government-funded research may implicate co-ownership or use restrictions. A prior lender may hold a security interest affecting certain IP assets. While none of these circumstances prevents a financing deal, problems may arise when management and investors discover them late in the process.

Patent counsel can help to identify these rights and obligations in advance and explain which provisions are routine, which require disclosure, and which may warrant corrective action or further negotiation.

6. Building an Investor-Ready IP Diligence Package

After review of key substantive issues by patent counsel, the final step is organization. Potential investors (and their IP counsel) do not want to reconstruct a company’s IP strategy from disorganized patent PDFs, scattered assignment documents, and spreadsheets prepared for prosecution management. Similarly, a company wants to provide a concise diligence package with clear demonstration of an organized and well managed IP portfolio.

Depending on the company, an effective IP summary and organized diligence folders may identify:

• key patent families;
• issued and pending claims relevant to core products;
• jurisdictions covered;
• ownership and assignment status;
• material licenses or encumbrances;
• important prosecution or filing deadlines;
• expected patent terms;
• relevant continuation opportunities; and
• the relationship between major patent families and commercial products.

The objective of such an organized portfolio is to make the company’s IP position understandable. An organized presentation can also help management identify weaknesses before investors do.

As outlined herein the role of patent counsel should begin before investors begin with IP diligence for a fundraise. Experienced patent counsel can help management understand whether the portfolio supports the company’s current business strategy, identify ownership or contractual issues, preserve rights before important disclosures, and prepare the company to answer difficult diligence questions accurately and efficiently. The best time to perform that work is before the investor’s diligence request arrives.

Jill Link is a Partner and Patent Attorney with McKee, Voorhees & Sease PLC and can be contacted at jill.link@ipmvs.com.