New Zealand's startup ecosystem has matured significantly over the past decade, and with that maturity has come greater sophistication among angel investors. Early-stage investors are no longer satisfied with a great product and a passionate founder. They're asking harder questions, including about intellectual property (IP).
The good news? Angel investors are not expecting perfection.
As a seasoned angel investor myself, I don’t expect a conclusive legal opinion on your freedom to operate assessment or a granted patent portfolio. What matters is evidence that you've thought about IP and understand the landscape. That you've identified the obvious risks and have a plan for managing them. It’s ok to say, “we need your investment to take our IP strategy to the next level”. But you do need some semblance of an IP strategy to start with.
A startup that can say "we've done a preliminary prior art search, identified two potentially relevant patents, and here's our thinking on why they don't block us," is in a dramatically stronger position than one that says, "we haven't looked into it yet." The first answer builds confidence. The second one raises a red flag that can stall or kill a deal.
The cost of not paying the "deposit"
Think of IP like a deposit on your first home. When a first-home buyer tries to enter the market without a deposit, they don't just get delayed, they're also exposed. They may be forced into less favourable lending terms, left vulnerable to market movements, or simply locked out entirely.
The same is true for startups that skip their IP groundwork. The risks are very real:
- A competitor may secure patent rights that limit your ability to operate in your own market.
- You may unknowingly infringe existing IP, leading to costly, time-consuming disputes and reputational damage.
- You may lose the ability to protect your own innovations because you've disclosed them publicly before filing.
- You may struggle to raise capital or complete an acquisition because your IP house is not in order.
These outcomes are not inevitable. But they become far more likely when IP is treated as an afterthought.
This is just your first house
The housing analogy goes further: no one expects their first home to be their forever home.
You buy a starter house and build equity. Over time, as your income grows, as your needs change, as your financial position strengthens, you move to something bigger, better, and more valuable. Each move is made possible by the foundation you laid before it. Your first house isn't the destination; it's the start of your property journey.
Your IP strategy works exactly the same way. The light-touch approach that's appropriate for an early-stage startup is your first house. It gets you into the market and starts building equity. But it's not where you stay.
As your business grows and matures, your IP needs grow with it. A provisional patent application becomes a full national filing. A single patent becomes a family of related patents. A domestic New Zealand strategy expands to cover key international markets. What starts as a light-touch approach needs to become a coordinated, well-resourced IP programme. This is because the risks are larger, the competitors are more sophisticated, and the value at stake is far greater.
The key is to plan for this transition from the beginning. A light-touch approach is appropriate at the start. But it's a starting point, not a permanent position. As you grow, so must your investment in IP.
This is part of a three-part series. If you missed the first part, you can read it at The IP deposit: Why startups can't afford to skip it.
Anton Blijlevens is a trans-Tasman patent attorney with over 32 years' experience advising New Zealand and Australian businesses on international IP strategy.
