How to survive VC due diligence and double your valuation: the true story of a founder on her way to the IPO

Startup founder, picture this: You sent your pitch deck to a handful of VCs carefully selected by OpenVC (by Stephane Nasser ), and now, you are focusing on your business, when suddenly, an email drops:

"Dear Founder, we are delighted to announce that our fund is interested in your startup. To move forward, we have mandated an intellectual property consultant to conduct an audit of your company. We ask you to give him the best welcome. Kind regards ..."

Your heart is racing, your hands are getting sweaty. Don't panic! Here's your survival guide to get through this moment of exposure.

Step 1: Inventory of your jewelry

First mission: take out your best Excel spreadsheet and list all your industrial property assets. Patents, trademarks, designs, models, everything is included! It's a bit like taking inventory of your wardrobe, but in a geek version.

Meanwhile, the consultant will play Sherlock Holmes 2.0 by searching through official databases. His goal? To check if you have not "forgotten" to mention your secret patent for transforming lead into gold (we can dream, right?).

Then it's time for the big match: your list versus the consultant's. Beware of anomalies! If you put "Revolutionary patent for flying cat" when it's actually a "Enrichment device for domestic felines", you might get annoyed.

Step 2: Dissect Your Rights Like an IP Surgeon

Now, let's get down to business. The consultant will go through each of your rights. He will create a database by linking each right to its history.

Prepare yourself for an interview session, or even a police interrogation. You will be asked to comment on the scope, importance, validity and dependency of each of your patents. This is your time to shine and show that your "Revolutionary Thought Beer Capper" is truly the future of humanity!

Step 3: Conservatory measures, or the art of keeping secrets

Here, we’re going to talk about the little hidden gems of your startup. The lab notebooks (where you scribbled your genius idea at 3am), your confidentiality procedures (in other words, how you make sure your intern isn’t going to sell your secrets to the competition for a handful of bucks).

Step 4: Contract hunting

Prepare yourself for an intense paperwork session. All your intellectual property contracts are going to be combed through.

We’ll also dig into your technical and business partnerships. Who knows, maybe your collaboration with the local bakery to create the “connected croissant” hides unsuspected IP treasures with a risk of litigation from the baker?

Step 5: Your IP policy under the microscope

It’s time to take stock: How do you really manage your intellectual property on a day-to-day basis? We’ll go over everything: your procedures for declaring an invention, the IP clauses in your employee contracts (yes, even the intern who only makes coffee), and even how you protect your software.

We'll even check if you're properly rewarding your little internal geniuses. Your management doesn't look at the IP consultant, you might say? Well, imagine that yes, at least the VC is interested in how you operate on a daily basis to maintain your technological leadership.

Step 6: Litigation, or the art of avoiding legal spats

Finally, let’s look at potential conflicts. Have you received threatening letters from a competitor who is furious that your “hamster meditation app” looks suspiciously like theirs? Are you in the middle of a lawsuit for accidentally copying a multinational’s logo onto your company t-shirt?

It's time to put everything on the table. We'll also check if you've thought about insuring yourself against these risks, because hey, you never know!

Conclusion

This audit may seem like an obstacle course, but it is also a great opportunity to take stock of your intellectual assets. This is your time to shine, to show that your startup is not just a nice idea on a corner of a tablecloth, but a well-oiled innovation machine.

So, take a deep breath, prepare your best smile (and your best files), and show this consultant that your intellectual property is as solid as your motivation to conquer the world! Who knows, by the end of this audit, you might have become an expert on IP, to the point of being able to give lessons to your investors.

NB: to be completely honest, this type of IP due diligence only concerns startups aiming to raise funds for a series-B, C, D..., to which other audits must be added (financial, managerial, commercial...). Due diligence on startups seeking to raise seed or even series-A are much lighter.

ITW Kamyar Maserrat - Patent Attorney Expert in Deeptech

Are you an innovator in AI, quantum computing, or robotics? ??

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Don't miss our upcoming LIVE event on October 25th at 6 PM (Paris time)!

Join us for a fascinating discussion with Kamyar Maserrat , a leading patent lawyer at Foley & Lardner LLP . He is an expert in IP applied to deep technologies.

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Kamyar will share invaluable insights on:

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This event is perfect for scientists, engineers, entrepreneurs, and investors looking to stay ahead in the fast-paced world of technology.

Register now and join us to ask your questions during the Live!

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Co-hosts:

Dr Gerald Farrokh Daneshvar, M.D.

Gerald helps early-stage health tech companies achieve rapid growth and global impact. Leveraging his deep industry experience and extensive network, he guides teams in areas like gene therapy, medical devices, and diagnostics to navigate complex regulatory landscapes and secure strategic partnerships.

Dr. Benjamin DELSOL (PhD, LL.M) , Quantum Physicist, European Patent Attorney, Expert Deep Tech Innovation / DELSOL

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