Investing in Startups – Early-Stage Businesses and Intangible Assets…

Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – Business Intangible Asset Strategies and Risk Mitigator

Conversations with investment professionals, regardless of their (investment ROI) ‘track-record, or sector of expertise,’ it is revealing when relative indifference is conveyed (pre-investment) to the business things intangible which…

  1. underlie – serve as foundations to the attractivity + differentiation of prospective investment opportunities.
  2. investment (ROI) outcomes are dependent – reliant and how same converge as sustainable operating culture.

Experientially, I characterize such perspectives along a continuum of casualness, carelessness, inattention, and imprudence with each-either variously wrapped in…

  • calculated presumptions that the duration of particular-investments can outpace the surfacing of risk vulnerability-probability-criticality, and/or
  • ex post facto reliance on civil actions – contractual provisions for the conversion or sale of particular-tangible – physical assets to recoup-lessen investment losses or under-performance.

There are arrays of (well-intended) reasons, factors, and rationales which are often in play, relative to negotiating conditions to ‘invest or don’t invest’. Several-of-which consistently appear rooted in demands of (a.) oversight of timeline progression, (b.) the issuance of IP, (c.) securing additional investment, and (d.) the absence – mitigation of specific reputational – project ‘slips, trips, falls, or fails’ which can undermine investments @ keystroke speeds.

Aside from examining ‘plain view’ financials and investors experiential (sector – market specific) projections of startup viability…

  • seldom, are the aforementioned, precededby, oor incorporate conducting objective pre-post investment due diligence on the ‘mission essential’ intangible assets which…
  • attract + underlie investors projected outcomes, and
  • must be intact for a start-up to progress.

Experientially…

  1. startup management teams (investors)whom I engage, seldom convey recognition of – differentiation for – operational relevance to the various types-categories-forms-context-applications of intangible assets developed, in play, and deemed ‘mission essential’ to achieving successively favorable and sustainable outcomes + valuation.
  2. investors instartups, newly launched, and/or early-stage businesses are inclined to (generally) frame – conceive proprietary – mission essential intangible assets (information-data) in IP (issued intellectual property) contexts, or as ‘trade secrets’.

During engagements with management teams and investors’ (not-infrequently), I hear both relegate the stewardship, oversight, and management of theproprietarily developed – applied – relied business things intangible in variations of…

  • don’t have time, its’ to difficult, what difference does it make, or may consider doing it only if they learn competitors are doing it.

Collectively, I am suggesting that whenever – why ever a business, irrespective of its stage of development or maturation, wishes to become positioned to attract – secure investment capital, absent operational familiarity with the ‘mission essential’ intangible assets they hold + rely, is increasingly risky – seldom prudent.

With experiential surety more investors, as part of their ‘invest – don’t invest’ decision making process, are likely to – preferably want to witness evidence of the sustainability of specific intangible assets which they deem to underlying their investment, e.g., how same are being overseen, safeguarded, and risks mitigated and not solely in accountancy language or as issued IP.

The ‘Business Intangible Asset Blog’ is experientially-researched, written, and produced by Michael D. Moberly, to provide a business things intangible perspectives, insights, and sometimes alternative views to-for readers to aid in identifying, distinguishing, assessing, valuing, safeguarding, and lucratively – competitively utilizing – applying ‘mission essential’ intangible assets. 

Readers are-encouraged to review and comment on this, and other posts wherein arrays of issues related to business things intangible is authentically conveyed.

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