Investment and Intellecual Property

We have been asked to look into making a new technology company “Investment Ready”.

What does this mean?

Essentially, we run through our “Investment Ready” checklist to ensure that the Client Company is correctly structured and has the necessary documentation in place to accept external investment. These items include: Corporate secretarial file up to date, financial accounts in order and audited, assets identified, WAIT – what does that mean?

Asset identification is a vital part of the process because, let’s face it, this is what the investor is probably buying. Sometimes the process is relatively simple. The Company owns property, equipment, etc. that is registered or otherwise documented to be an asset of the Company (see our blog on personal property securities register.)

Often, the key asset of the business is not tangible. The asset may be a business process, goodwill, technology or other intellectual property. So what do we do to identify these assets as part of the Investment Ready process?

There are a number of ways to document ownership of intangible assets and the method used will depend on the type of asset. If the Company uses a patentable process or technology, is the patent registered? Where? For how long? Has it been assigned to the Company (it is amazing how often this is missed.)

Business processes should be documented in a Procedure Manual or similar (you cannot really expect someone to invest in your Company when the key asset is in your head.)  Is goodwill the value of your customers? Do you have a customer database or CRM system?

In summary, the more tangilbe (documented) the Company can make it’s intangible assets – the more valuable they will be to your potential investor.