Patent Before Raising Venture Capital? | Lockhart IP

If you’re gearing up for a fundraise, someone has probably asked you, “So, do you have a patent?” Maybe it was an advisor, an accelerator application, or an investor during a pitch. And now you’re wondering whether you actually need a patent before raising venture capital.

The short answer: no, you don’t need an issued patent to raise venture capital. But you do need an IP strategy. And in most cases, filing a provisional patent application before you start talking to investors is the smartest move you can make.

Let me explain why, and then I’ll give you a specific action plan based on your fundraising timeline.

What Investors Actually Care About

Here’s something that surprises a lot of founders: investors aren’t expecting you to walk into a pitch meeting with a granted patent in hand. They know patents take time. The average utility patent takes roughly 27 months from filing to grant, and that’s for straightforward applications. Complex ones can stretch past 44 months.

What investors do care about is whether you’ve thought about your IP and taken steps to protect it. They want to see that you understand your competitive moat and that you’ve been intentional about securing it.

In practical terms, that usually means they’re looking for:

• Patent-pending status on your core technology (a provisional or non-provisional application on file)
• Clean IP ownership, meaning proper assignment agreements so the company owns the IP, not the individual founders
• No obvious landmines, like a public disclosure that started a clock you didn’t know about, or a co-founder who never signed an IP assignment

I wrote a detailed post on this: IP Due Diligence for Startups: What Investors Look For. If you want to know exactly what shows up on an investor’s IP checklist, you can check that out.

How Patents Impact Startup Fundraising

I don’t love making decisions based on fear, but the numbers here are worth noting.

Startups with patent rights are roughly 10x more likely to secure venture capital funding than those without any IP protection. A startup’s first patent approval correlates with a 53% greater probability of attracting VC investment. And venture-backed startups with patents are valued nearly 2x as much as comparable startups without them.

That doesn’t mean a patent is a magic ticket. Investors are funding your team, your market, and your traction. But having IP protection signals that you’re building something defensible, and that you’re thinking like a serious business, not just a project.

About 56% of startups that eventually get a patent file their first application before raising a seed or Series A round. So the majority of funded, IP-protected startups already had a patent application filed before they went out to raise capital.

Why a Provisional Patent Is Usually the Right First Step

If you’re not familiar with provisional patents, I have a video that walks through the basics. But here’s the quick version.

A provisional patent application gives you 12 months of “patent pending” status and it establishes your priority date. It doesn’t get examined and it doesn’t turn into a patent on its own. You have to file a full non-provisional utility patent application within those 12 months.

For founders in fundraising mode, this is incredibly useful because:

1. It’s fast. You can have patent-pending status within a week or two.
2. It’s affordable. The USPTO filing fee is as low as $65 if you qualify as a micro entity. With attorney help for drafting, you’re typically looking at $3,000 to $5,000 total.
3. It buys you time. That 12-month window lets you raise money, validate your market, and decide whether a full patent application makes sense, all while your IP is protected.
4. It signals seriousness to investors. Showing up with “patent pending” tells investors you’ve done your homework.

If you want a deeper look at the pros and cons, I wrote a full post on provisional patents.

For founders who are really bootstrapping and want to understand the cost range for all of this, I put together a full cost breakdown video that covers everything from the $65 DIY provisional to a $15,000+ utility patent.

Your Startup Patent Strategy Based on Fundraising Timeline

This is where I think most of the content out there falls short. Everyone says “patents help with fundraising,” but nobody tells you what to do based on when you’re actually raising. So here’s how I’d think about it.

Raising in 90 Days or Less

You’re on a tight timeline. Here’s what to prioritize:

1. File a provisional patent application. Work with a patent attorney to get a solid provisional on file covering your core technology. This can realistically be done in 1 to 3 weeks. Don’t try to cover every possible feature. Focus on the inventive core of what makes your product different.
2. Get your IP assignment agreements signed. Every founder, employee, and contractor who touched the technology needs to have assigned their IP rights to the company. This is one of the first things investors check, and it’s a red flag if it’s missing. Here’s more on what contracts startups need.
3. Do a quick prior art search. You don’t need an exhaustive freedom-to-operate analysis right now. But you should have a basic sense of what’s already out there so you can speak intelligently about your competitive landscape.
4. Don’t worry about a full utility patent yet. You won’t have time, and investors don’t expect one at this stage.

Raising in 6 Months

You’ve got more room. Use it wisely.

1. File a provisional patent application now, not later. The sooner you establish your priority date, the better. If you’ve been publicly discussing or demonstrating your product, you may already be on a 12-month clock. Filing now locks in your priority date.
2. Consider whether you need more than one provisional. If your product has multiple independently inventive components, separate provisionals might make sense.
3. Get a patentability assessment. Have a patent attorney evaluate whether your technology is actually patentable. This gives you confidence when investors ask about your IP, and it helps you avoid spending money on something that won’t hold up.
4. Clean up your IP housekeeping. Assignment agreements, contractor IP clauses, and any open-source compliance issues. You want all of this buttoned up well before due diligence starts. The IP due diligence post walks through the full checklist. You should also review common legal traps for businesses to make sure you’re not making any of the mistakes I see founders make all the time.

Raising in 12 Months

This is the best-case scenario for IP preparation.

1. File a provisional and plan your non-provisional. You may have time to convert your provisional into a full non-provisional utility patent application before your raise. That puts you in a stronger position than a provisional application alone because it means your application is actually being examined.
2. Build a broader IP strategy. Patents might be just one piece. Trademarks for your brand, trade secrets for your proprietary processes, and copyright for your code all contribute to your IP portfolio. I have a primer on the four major types of IP if you want a quick overview.
3. Consider a freedom-to-operate analysis. At this stage, investors may ask whether you’ve checked for potential infringement risks. Having a formal FTO analysis shows serious diligence.
4. Document everything. Keep records of your development timeline, invention disclosures, and any public disclosures. This documentation can be valuable during due diligence.

When You Might Not Need a Patent Before Fundraising

I’ll be honest, not every startup needs a patent before fundraising. If you prefer video, I cover this topic in Most Startups Don’t Need a Patent (Here’s Who Does).

There are situations where patents aren’t the right play:

• Your moat is speed, not technology. If your advantage is execution, network effects, or being first to market rather than a novel technical innovation, investors may not expect patent protection.
• Your technology isn’t patentable. Not everything qualifies. Abstract ideas, laws of nature, and purely mental processes generally can’t be patented. If your innovation is in your business model rather than your technology, a patent may not be an option.
• You’re in a space where trade secrets make more sense. Some competitive advantages are better protected by keeping them secret than by disclosing them in a patent application. Algorithms and manufacturing processes sometimes fall into this category.

Even in these cases, though, you should still have an IP strategy you can articulate to investors. “We’ve evaluated our IP position and determined that trade secret protection is the right approach for our core technology” is a much better answer than “We haven’t really thought about it.”

FAQs

Next Steps

You don’t need an issued patent to raise venture capital. But you need to show investors that you’ve thought about your IP, taken reasonable steps to protect it, and have a plan going forward. For most startups, that means filing a provisional patent application before you start investor conversations. It’s fast, it’s affordable relative to what you’re raising, and it sends the right signal.

If you’re new to patents entirely, I’d recommend starting with Patents Explained in 7 Minutes to get oriented, and then reading through the IP due diligence checklist so you know what investors will actually evaluate.

If you’re getting ready to raise and want to make sure your IP is in order, I’m happy to help you sort out the right strategy for your fundraise timeline and budget. Here’s a link to my calendar. Feel free to grab a time that’s convenient for you.

Related Articles

• IP Due Diligence for Startups: What Investors Look For
• Provisional Patents: A Smart Move for New Inventors?
• What is Patentable?
• What Contracts Do You Need in Place For Startups?
• 4 Major Types of Intellectual Property