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Startup IP Due Diligence Preparing the Records Behind Your Product
Startup IP due diligence asks whether the records support the company's account of the technology and rights behind its product. Prepare by identifying important assets, the people who contributed to them, and the agreements or other records that explain the company's position. Bring uncertainty about ownership or permitted use to counsel.
Cooley's IP diligence guidance identifies ownership, protection, and third-party rights as review areas. The appropriate depth depends on the product and transaction. A company using licensed technology has different questions to answer from one commercializing a newly developed invention.
Identify the assets behind the investment story
Start with the product claims in your deck. For each important capability, identify what enables it and who can explain its development. This might include software, technical designs, proprietary research, branding, or licensed components.
Write an asset inventory that connects the description to relevant records. Avoid a single entry called intellectual property if it hides several different sources. A reviewer should be able to distinguish work created inside the company from material obtained elsewhere.
Trace the contributions that matter
Record who worked on each important asset and when. Include founders, employees, consultants, and other contributors where relevant. Locate their applicable agreements and note which periods or deliverables require clarification.
In a hypothetical product team, a consultant built an early module and an employee later rewrote part of it. The founder should describe both contributions and locate the corresponding records. Saying the current team built the product would not explain the earlier work.
Keep assignments and licenses connected to the asset
Gather executed agreements, relevant amendments, and schedules that identify the work or rights involved. Cooley's preparation guide includes assignment documents and contributor agreements among possible requests. Counsel should assess whether the collected record adequately supports the company's position.
Keep licenses distinguishable from records of ownership. Identify the material used, the applicable agreement, and questions about its scope. If the team cannot determine which terms apply, record that uncertainty for review instead of assuming that access to a component gives unrestricted use.
Explain the status of protection and development
Organize the existing records of registrations, applications, and technical development as applicable. Describe their actual status and relevant dates. Keep pending steps visible so an investor can distinguish a submitted application from a completed registration or other outcome.
Prepare a factual explanation of what the product does today and what remains in development. A demonstration can show a capability, while the agreements and other records answer different questions about the rights behind it.
Build an issue list for counsel
Use an entry for each unresolved point with the asset, supporting documents, factual uncertainty, owner, and next action. Prioritize issues connected to the central product claims or current investor requests. Track the outcome of professional review alongside the record used to support it.
For gaps in the collected material, see our Missing Due Diligence Documents guide. A template or unsigned replacement should remain clearly labeled while the team determines the appropriate response.
Share reviewed evidence with the right context
Have counsel assess the intended disclosure set, particularly where technical detail or privileged advice is involved. Provide enough context for the investor's question and agree on how requests for greater detail will be handled.
DocChief lets founders share selected materials through customizable, trackable links before inviting established interest into an organized smart data room. Its corporate-record health checks and compliance gap analysis can help the team investigate gaps in the maintained documents. Explore DocChief to keep product evidence connected with the corporate record and the follow-up work it requires.