An Analyst's Guide to Patents

Abstract

Currently, Baylor Angel Network analysts and angels alike handle patent diligence without a simple framework to evaluate the patent component of an early-stage company. I aim to provide a concise, useful guide to help analysts rigorously and objectively evaluate companies that depend on patent protection. In sum, I recommend that the analyst should understand the stages of the patent(s), ask strategic questions to clarify the quality and depth of protection, and understand patent value in its broader context. Patents are primarily valuable when the company creates value within the patent’s boundaries and inasmuch as the company has the practical ability to defend its patent rights. In addition to the patent overview, significant analysis has been completed on specific, confidential, medical device startups. Example analysis (anonymized to protect sensitive information) is included in the appendix and constitutes much of the work that went into the thesis project.