🎯 Issue #89: The Ultimate Patent Strategy Guide for Tech Startups
Alexander Flake, Founder of Climate Patent Collective, discusses everything that startup founders need to know about filing patent applications and patent protection for tech startups
💬 Welcome to issue #89 of Between the Lines
Good morning & happy Thursday. The idea of building a tech startup is definitely exciting, but it can also be intimidating for new founders who may not be familiar with the process of protecting their innovative technology through patents or other means.
This week, Claremont grad and patent expert Alexander Flake (HMC ‘14) takes us through the ins and outs of patent application, understanding what they are and why they're valuable for startups, and everything else founders need to know about patent protection. It’s a Claremont world out there. 👇
~ Josh, Miles, Pat
📢 👥 Community Voices: The Ultimate Patent Strategy Guide for Tech Startups
Author: Alexander Flake
Claremont grad Alexander Flake (HMC ‘14) is a patent expert who began his career at Fenwick & West, where he worked on patent portfolios for top clients like Apple, Dropbox, and Uber. Seeking a more meaningful cause, Alex moved on to Run8 Patent Group, where he helped clients raise over $555M in disclosed funding and exit for $225M.
Alex's passion for climate mitigation and adaptation led him to start the Climate Patent Collective, a firm that offers affordable and strategic patent assistance to early-stage climate tech startups. Alex has since worked with several startups and mentored founders while partnering with VCs like the Cool Climate Collective.
Launching a tech startup can be thrilling, but nerve wracking moments are also inevitable — especially when a potential seed investor asks, “Is your technology patent-protected?” during your pitch.
More often than not, your answer will be “No, but we’re looking into it”; after all, you’ve probably been focusing on building your MVP. While you may recognize the importance of patent protection, you’ve likely also realized that patent lawyers are expensive. Or perhaps you have no clue where to begin when it comes to the “whats”, “whens”, “hows”, and “whys” of patent protection.
If this scenario sounds familiar, don’t panic. In this guide, I’ll provide a framework to help you confidently answer these dreaded patent-related questions — even if you haven’t filed your first patent application.
Why Should I File Patent Applications?
Most of the confusion around patents stems from a lack of understanding about what they are and why they’re valuable in the first place.
Fundamentally, patents are a contract between your company and the government. In exchange for sharing your technology publicly, the government provides you with the right to exclude others from using your invention.
But this doesn’t mean patents are only valuable if you enforce them via litigation, a process most startups can’t afford to participate in. Nor does it mean that obtaining a patent means restricting others from using technology that offers value to the world.
Here’s why patents benefit startups beyond their most obvious use case.
1) Patents as a Signal
Patents are an indicator of a company’s innovation — although the patent system is far from perfect at identifying true innovation from incremental progress, a granted patent is essentially a stamp of approval from the government that your technology is novel and non-obvious.
This vote of confidence provides validation to investors and other stakeholders that your technology is valuable. Additionally, the fact that your startup is willing to invest in a patent application signals your confidence in your invention’s importance. (In other words, why would you dedicate resources to protecting something worthless? Startups can rarely afford to pursue bluffs, which makes this angle that much more convincing.)
Even before your patent application is granted, it offers a unique marketing opportunity for you to broadcast the potential impact of your technology. A good patent can tell that story to your investors, business partners, competitors, potential acquirers, and other stakeholders, giving you a leg up in fundraising and negotiations.
Fun fact: studies suggest that each patent application in a company’s portfolio is correlated with approximately $530,000 in added venture funding — considering patents cost $10,000-$40,000 each, that’s a solid ROI. Additionally, one report found that between 2011 and 2022, patent-seeking startups accounted for 78.6% of total exit value despite representing only 24.1% of total exits.
2) Patents as a Deterrent
Even if you never intend to enforce your patents, they can deter larger companies from doing so — even if they have the resources. A well-designed patent portfolio can incentivize competitors toward a lucrative licensing agreement or acquisition instead of litigation.
This phenomenon is similar to mutually assured destruction: when a patent is enforced against your company, you can return fire by enforcing your own patents.
3) Patents as Assets
If you’re eyeing a future acquisition, don’t skimp on your patents — they can improve acquisition outcomes by providing a tangible asset that can be transferred to an acquirer, separate from human capital and existing product-related infrastructure.
After all, acquirers know that your employees may decide to move on, and your current product may lose relevance over time. However, patents last for 20 years from their priority date (the filing date of the first application in a “family“ of applications) and can provide a roadmap for future applications of the technology, delivering value long after other benefits of an acquisition fade.
Just look at the data — in publicly available acquisition information, granted patents have been valued as highly as $450,000 to over $1,000,000 each.
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This year, I’m hoping to support more Claremont startups and budding entrepreneurs — whether you’re currently working in or curious about climate tech or patents, I’d love to connect. Please reach out at alex@climatepatents.co!
Read the full article below to find out more about when, why, and how to file a patent. 👇
🤝 Pardon the Introduction: Delphi Labs
Michael Irvine (CMC ‘16) and David Jayatillake are the Co-founders of the analytics automation tool Delphi Labs. Michael is an experienced Tech Lead for analytics and engineering teams, the #1 contributor to open-source dbt packages, and a full-stack engineer who has built applications for different industries such as EdTech and Healthcare. His Co-founder, David is a seasoned Leader of Data Analytics who has led multiple data teams across various areas like credit, payments, pricing, revenue management, e-commerce, and retail.
They’re working on a new product which uses a combination of NLP and semantic layers to automate the data analytics workflow for companies, making data easier to understand and access for the people who need it the most. Users can ask questions in the context they work (Slack/Teams/email), and get automated answers quickly and safely. Delphi simplifies the whole question-to-answer process with AI and even the handoffs to human analysts if needed.
David was recently on the Drill to Detail podcast to talk about the role of semantic models and the marketplace today, large language models and the ChatGPT phenomena, and how Delphi Labs is planning on bringing AI to Slack and the modern data stack. Check out the full episode. 👇
📣 Pardon the Announcement: Sydecar
Launching a venture fund is no easy feat, but Claremont entrepreneur David Meister (CMC) and Sydecar are making it simpler and more accessible than ever before.
David is the Co-founder and CBO of Sydecar – a frictionless deal execution platform for venture investors. They just launched their new fund product, Sydecar Fund+, which allows fund managers to:
Launch a fund and accept capital commitments in less than a week.
Offer customized terms and economics for each investor depending on your unique relationship.
Streamline investor onboarding with mobile-friendly subscription agreements and fund and compliance documents.
Invite third-party investors to an opportunity while maintaining a single line on a company’s cap table.
Remain in full control of your fund by leveraging a self-managed entity, while Sydecar acts solely as the administrator, taking direction directly from the manager.
Avoid paying expensive service providers for fund formation, regulatory filings, tax, accounting, and reporting.
For more details on Fund+, check out their full announcement.
💼 Who’s Hiring?: Nimbus Health & Scratchpay
Nimbus Health is a healthtech startup that addresses the unique needs of the 50M+ Americans who suffer from asthma, COPD, and other respiratory conditions through an innovative blend of in-person care, care coordination, and remote patient monitoring. The company is launching a network of pulmonary clinics equipped with a technology stack that continuously analyzes patient data and automates elements of patient outreach. Claremont grad Clay Spence (CMC ‘16) is the Founder of Nimbus, and he led the company on their successful $4.8M Seed round last year. He’s now looking for a Senior Full-Stack Engineer to join their growing team at their Atlanta office:
Scratchpay is a fintech startup that makes patient financing, payments, and communications easier than ever before. The company’s goal is to make difficult financial decisions simple and increase everyone’s accessibility to fair, affordable, and transparent medical financing using their platform. Last year, the petcare financier turned healthcare financier closed a $35M Series C bringing their total capital raised to $108M+ since the company’s 2016 inception. Claremont graduate Caleb Morse (PO ‘07) co-founded the company, and they’re hiring for several open positions:
Check out the other ~5,000 open jobs at 400+ Claremont-affiliated companies here on our Storyboard. Plus, create a profile and enter your preferences to get alerted to new job postings relevant to you, be they the 1,000+ remote jobs, 100+ internships, or 40+ part-time positions available. We’ve published research that shows that Claremont-founded companies that disproportionately hire Claremont talent outperform — so pay attention, Claremonsters!
If any of these roles catch your eye 👀 , apply and mention Between the Lines. Or, if you are an employer looking to hire tip-top Claremont talent, fill out this form to have your jobs featured.
🗣️ Conversations on the Interwebz:
This week’s top read 🔥
Claremont entrepreneur Joey Krug (PO ‘14) recently shared that he is joining Founders Fund as a Partner. His focus will be on defining the next decade of their crypto strategy while looking for the next wave of generational crypto startups and founders to back. Joey is the Co-founder of consumer fintech company Eco, and has been an adviser, co-founder, and investor in several other crypto projects such as Ox, Numerai, and Forecast Foundation. More on why he’s joining Founders Fund and his current thoughts on the crypto space in this article.
This week’s must-watch 📺
Claremont entrepreneur Seth Winterroth (CMC) and his VC firm, Eclipse Ventures, just announced $1.23B in two new funds – Eclipse Fund V and Eclipse Early Growth Fund II – bringing their total assets under management to ~$4B. With this capital, Eclipse plans to continue partnering with companies and founders tackling the world’s most pressing challenges.
Everything else you need to know💡
Congratulations to Claremont entrepreneur Emre Ozgur (CMC ‘03) and his company Safe Sweat for getting accepted to CBC’s hit reality TV show, Dragons’ Den. Emre is the Co-founder and CEO of Safe Sweat – a facility that offers private spaces equipped with top-of-the-line fitness equipment and digital programming for clients.
Claremont grad Vanessa Castañeda Gill (CMC '18) is the Co-founder and CEO of the online gaming platform for neurodivergent youth, Social Cipher. They were recently selected to join a new cohort for The LEGO Foundation’s Play for All Accelerator which is a program that accelerates products, services, and experiences that recognize neurodivergent children's strengths and nurture their skills.
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🍽️ BTL Snacks:
🔬She’s Leading The SynBio Revolution….. For years, the 7Cs have been a training ground for world-renowned scientists and entrepreneurs. Forbes recently recognized Claremont graduate Jennifer Holmgren (HMC ‘81) as one of the 10 women who are leading the synthetic biology revolution. Jennifer is the CEO of LanzaTech – a Carbon capture and transformation company that harnesses the power of biology and big data to create climate-safe materials and fuels.
💰 Bad User Experiences That Cost Millions….. Most companies today know that UX design is crucial to improving brand perception, retaining users, and ultimately increasing revenue. In this Forbes article, Claremont grad Ritvij Gautam (CMC ‘14) cites several examples of companies that have lost millions because of poor UX design and gives us more insights on how investing in good UX can lead to saving money in the long run. Ritvij is the CEO and Co-founder of Trymata, a remote user testing company that helps businesses get a holistic understanding of how users interact with their digital products.
🌳 Living Carbon’s Mission….. The results are in. Claremont grad and Living Carbon CEO Maddie Hall (CMC ‘14) shared that the peer reviewed white paper on their experimental photosynthesis-enhanced trees is now available. The results provide a proof of concept for engineering trees to help combat climate change. Maddie and her genetically modified poplar trees are on a mission to responsibly rebalance the planet’s carbon cycle using the inherent power of plants.
💻 Technology's Role in the New Workforce Ecosystem….. Technology has been playing an increasingly important role in the modern workforce, from helping to automate mundane tasks to enabling new ways of working. Claremont entrepreneur Ray Grainger (HMC) explores how technology has been changing the workforce and how it can be used to improve efficiency and productivity. Ray is the Founder and Executive Chairman of Kantata – a transformative vertical SaaS platform that improves professional services automation for modern organizations.
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