In order to make a great pitch, founders need to highlight what sets their startup apart from the existing competition. However, founders must be careful about how they deal with sensitive information. Information could be misused/leaked to give an edge to rival companies in which the potential investors have a stake. In order to prevent this from happening, founders should protect their intellectual property. How does one go about this procedure while effectively convincing the investors that their idea and brand are worth funding?
Building a great pitch!
- Problem: Each pitch should include ‘’the problem,’’ i.e: a brief on what your business will change about the way things are being done presently or the “status quo”, why the status quo is a problem, or why it needs to be improved. This will establish the utility of the business being pitched.
- Target audience: Who does the aforementioned problem affect? How will the business be changing things for them, and what value can they get from the business? Answering these questions adds an element of commerciality to the business. The potential investors will have a clear idea of the market.
- Solution: This is the core and heart of the pitch. This will be the make-or-break segment. The focus should be on showing why your solution deserves the chance to be funded. Why is it better, what sets it apart, and why should it compete with or replace existing ones? Establishing this will show investors exactly why they need to fund it.
Concerns to keep in mind:
It may seem very rosy, however, in reality, it is not that simple. Below is a list of things to look out for.
- Copying of industrial design: In the case of companies that are based on innovative flagship products, the design may need to be revealed to investors. The revolutionary aspects can be stolen and replicated on a larger scale by base companies that have a large amount of funding.
- Business Model: The business model, when revealed, can be easily replicated, which can take away the first mover's advantage or even a large part of the market share. Once the working of the model is understood, it is not hard to identify, replicate and apply to different businesses.
- Ideas: Business ideas may not be protected as a whole concept. The extent of the protection varies from place to place. If the idea is yet to be implemented/registered by the original founders, then very little can be done to protect it at that point.
- Branding: The way a company presents itself to potential customers in order to attract business can really set it apart. Without registered trademarks on symbols, logos, names, or even taglines, they can be stolen or replicated. This is not just limited to the theft of intellectual property but the company's entire identity.
How to prevent these unfavourable situations from arising:
- Have an IP strategy: Consult law firms or professionals that are into IP regulations. They can audit all of the valuable types of intellectual property that the company needs to protect. After identifying these vulnerable aspects, they can be classified into categories like proprietary information or trade secrets. These professionals or firms will help your business get registered and protected through the proper legal authorities. Once legal protection is available, the Intellectual property cannot be misused.
- NDA: Sign a standard non-disclosure agreement to ensure confidentiality. By doing so, a potential investor cannot leak or misappropriate any of the intellectual property shared with them during the course of funding. Ensure that the agreement has a broad scope. Additionally, ensure the NDA goes through the due processes of notarisation, to be enforceable in a court of law.
- Seek protection before the fundraising process: Ensure that all of the registration to protect intellectual property is complete prior to the fundraising. Even if the process has been started but not completed, there will be a possibility of being caught up in litigation. This can happen in the event that the original founders try to defend their claim of being misappropriated while the due process is not yet complete.
How to make that pitch without giving away unprotected IP
The elements of a great pitch require businesses to prove their effectiveness to investors. Sometimes it may require the usage of IP that is either unprotected or cannot be protected by laws. Here are some ways of ensuring that the IP is not vulnerable while the pitch is effective.
These are simple but effective ways to assert that the company is confident in its abilities while at the same time protecting its sensitive information.
- Caveat: Oral warnings and labels on private information that are to be kept confidential. Classify all sensitive information as proprietary during the presentation of the pitch as well as when you label the contents on folders being shared for the fundraising round.
- Proof of concept: This is an option to delve into sensitive information to show what sets you apart from the competition. The results will have a better impact on potential investors by showing sensitive information on how the product works. This method has multiple advantages and should be used wherever possible.
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