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Intellectual Property – Worthless To A Startup, Priceless To A Big Dumb Company

InfoChachkie

Intellectual Property (IP) is an ugly thing at a startup. However, to a Big Dumb Company (BDC), a startup’s IP is a thing of beauty. How can IP be worthless to a startup yet very worthwhile to a BDC? Because IP has intrinsic value, but only in the right hands. Yet, it does nothing to help you execute your business model.

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Should Startups Focus on Profitability or Not?

Both Sides of the Table

If you spent the 3 years perfecting some hugely differentiated technology IP that may also be different. of course there are MUCH more sophisticated financial tools than either of these, but PEG is a short-hand many people use]. Let’s consider the following two software companies, both of which have 66% gross margins.

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

This is why investors really like SaaS software companies where you have recurring revenue and your largest customer accounts for < 5% of your revenue and your renewals rates are > 90%. Many software companies have > 80% gross margins which is why they are more valuable than say traditional retailers or consumer product companies.

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Roping in the Legal Eagles

InfoChachkie

Yet, despite his exceptional courtroom theatrics, you would be foolhardy to hire good old Johnnie to review your software cross-licensing agreement. If taking part-time evening courses is not possible, seek out an online curriculum. Bill Review – Believe it or not, lawyers and their staff are human (insert “gasp” here).

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A Few Key People Really Can Make a Huge Difference

Both Sides of the Table

Of course I have. He listed all of the product releases that were up coming, the customers that were in the pipeline and where he saw his competition moving. This article originally ran on TechCrunch. I’m in Seattle this week. People keep asking me if I’ve “seen anything interesting.&# Can’t list them all.