Tips for Pitching to Business Angels

Guardian Angel by Bernhard Plockhorst

 

Jane Lambert

A business angel is an individual who provides capital to startups and other small and medium enterprises in return for shares or debentures. He or she may also offer advice, introductions to his or her connections and technical expertise. They are invaluable in that they are willing to take risks that would deter other investors.

The reason I am writing this article is that I recently attended a pitching event at which three business owners presented their investment proposals to a group of angel investors.  As the proceedings were confidential I can say nothing about the event other than that all the presenters were impressive and every proposition appeared to be viable.  

For those who are yet to make their first pitches as well as those who wish to learn more, I commend Stripe Inc.'s How to Pitch to Angel Investors. According to Wikipedia, Stripe, Inc. is a multinational financial services and software-as-a-service company with offices in Dublin and San Francisco.  The article was last updated on 3 July 2024 and while it was not addressed to British readers its guidance is relevant to entrepreneurs in this country.

One of the questions that angels are likely to ask is: “What are the main risks for your business, and how do you plan to mitigate them?” Stripe offers the following answer:

"Acknowledge the risks facing your business, whether they are market risks, operational risks, or competition. Discuss your strategies for mitigating these risks, showing that you have a realistic view of the challenges and a plan to address them."

That is not so very different from tthe simple five-point strategy for start-ups and other small businesses that I suggested in Business Planning and IP: A Practical Example 4 April 2018 in NIPC Inventors' Club:

1. "Identify the main revenue streams for your business over the business planning period. List the profitable products or services that you supply or for which your receive royalties or licence fees.
2. Consider the likely threats to those income streams. In most cases these are going to be commercial. Competitors will launch new products, reduce their prices or maybe consumer buying behaviour may change. Only in a minority of cases will you have reason to fear copying of your designs or technology or adoption of similar branding.
3. Devise appropriate counter measures. In many cases these will be commercial too even if you fear copying or passing off. In some circumstances, launching a new model, re-branding, reducing your prices or finding new markets can be as effective and often cheaper and more certain than litigation. However, a commercial option is not always available or attractive. For those cases where it is not you may need to plan a legal response.
4. Choose the optimum legal protection. Put yourself in the position of your customer and consider why he or she is likely to find your product attractive. Is it its appearance, the way it works or the reputation of your business? If it is the appearance of your product you should see whether you can register its design either for the UK alone or the whole EU. If its your reputation you should think about registering your business name or logo a trade mark. If it is the way the product works or is made a patent may be the best option. If it cannot easily be reverse engineered you could keep it under wraps as a trade secret. Maybe unregistered design right will be enough. Factors to take into account will include the shelf life of your product, the size and value of the market, whether you want to sell it abroad and all sorts of other matters.
5. Make sure you can enforce your legal protection. Although bootlegging, counterfeiting and piracy are crimes as well as torts primary responsibility for enforcing your intellectual property rights rests with you. That means bringing infringement proceedings in the civil courts. In England and Wales the costs of a High Court action can exceed £1 million. In simpler cases that can be brought in the Intellectual Property Enterprise Court recoverable costs are capped at £50,000 for determining liability and £25,000 for assessing damages or other profits to be disgorged. There is a small claims track where costs are limited at a few hundred pounds for certain types of IP claims under £10,000. If you cannot afford such costs out of revenues then you should consider intellectual property insurance or other kinds of funding."

Most legal indemnity policies exclude intellectual property disputes.  For many years, it was very difficult to obtain cover against the costs of IP litigation.  That has changed recently in that there are now several specialist brokers in this field.   The Intellectual Property Office has produced some excellent Guidance on Intellectual Property Insurance, which was last updated on 21 Feb 2020.  The Chartered Instititue of Partent Attorneys publishes a list of brokers and their contact detail,  The Chartered Instititue of Trade Mark Attorneys has also compiled a downloadable list of IP Insurance Providers,  I have written extensively on the topic over the last 20 years and links to my articles can be found at the foot of IPO Guidance: Intellectual Property Insurance which I posted to NIPC Inventors' Club on 25 Feb 2020.

Further information about intellectual property for presenters can be found in Enterprising Ideas - A Guide to Intellectual Property for Startups published by the World Intellectual Property Organization in 2021.  I would particularly commend the sections on "Other Strategic Ways to Exploit IP" between pages 38 and 50 which contains excellent advice on transactions with angels and other sources of finance and "Managing Risks" between 51 and 57.

Anyone wishing to discuss this article further may call me on +44 (0)20 7404 5252 during normal UK business hours or send me a message through my contact page at any time.

Wales Enterprise Day

 

Jane Lambert

For the last three years, the Menai Science Park (M-SParc) has contributed to World Intellectual Property Day.  Every year the celebrations focus on a different theme. This year's was Taking Your Ideas to Market. As I wrote in Menai Science Park's Contribution to World IP Day 2021, that theme "could not be more appropriate for the Menai Science Park because that is what it does all through the year."

As in previous years, Emily Roberts asked me to help her choose speakers for the event.  I discussed her request with Richard Fraser-Willaims of Business Wales.  It quickly became clear to us that the topic was far too large for a single webinar.  Richard suggested that we should concentrate on start-ups on World Intellectual Property Day. If that event was successful we could hold a second on scale-ups in Autumn.  I passed on Richard's suggestion to Emily and she agreed.

I am glad to say that our contribution to World Intellectual Property Day 2021 was a great success.  Accordingly, Emily asked me to suggest a programme for the Autumn event.   I proposed:

• Ed French of Pinpoint Capital
• Alison Orr of Inngot
• Sean Thomas of Thomas Harrison IP, and
• Andrea Knox of Knox Commercial Solicitors.

Emily accepted my proposal but asked:

"Is there a significant date in those months, for example connected to IP or scaling up in some way?"

I replied:

"There is a British intellectual property day on 1 July but not many people have heard of it.

Why don't we create our own Diwrnod Eiddo Deallusol Ynys Môn, Diwrnod Eiddo Deallusol Ynys Menai or if we can enlist the support of the Welsh government, the Senedd, the IPO, the Welsh Universities, business and other institutions, even a Diwrnod Eiddo Deallusol Cymru on whatever day we choose?"

A few days later Emily sent a draft Eventbrite card promoting our seminar in celebration of "Wales Enterprise Day."

Our webinar on scaling up took place yesterday.   I thought it was the best seminar on IP that we have ever presented to M-SParc.  I thank all the speakers for their excellent presentations.   But our seminar was followed by a much bigger event: "Den y Dreigiau" a great angel and seed-funding pitching event operated in conjunction with Global Welsh. 

That was a magnificent opportunity to see the achievements of the businesses that have developed in M-SParc. There were some that I already admired such as Haia and Cufflink but I learned about others in agricultural technology, environmental protection, therapeutics, veterinary devices and other fields that are also great.  All the presenters spoke passionately.  All were impressive.  I wish them every success in their endeavours.

In the room from which our seminar was hosted, there is a bell to announce good news.   Emily rang that bell when Sean Thomas announced that he will hold regular IP clinics in M-SParc with a bit of help from Andrea Knox and me.  Sean has now moved back to Anglesey (which happens to be his birthplace) and will practise from the island.   It would appear from IP-Reg's database that he will be the only patent or trade mark attorney in Wales to the northwest of Chepstow.

Anyone wishing to discuss this article may call me on 020 7404 5252 during normal business hours or send me a message through my contact form.

Copyright Licensing

Menai Science Park

© 2018 Jane Elizabeth Lambert (all rights reserved)

 

Jane Lambert

On 9 Feb 2021, I was the guest of the Menai Science Park's Enterprise Hub.  I had been invited to give a talk entitled "What every Business in Wales should know about Intellectual Property" which I had previewed in my article of 7 Jan 2021.  I had prepared some slides on the topic which I posted to Slideshare this morning.

Considering that we started the talk at 17:45 we had a good turnout.  Our group would have been a very tight fit had we met in the M-SParc boardroom though there were not enough of us to have filled the training room. It was, therefore, the ideal size for a two-way discussion.  I used the first few slides to start the discussion.  Before long the questions came rolling in.

One of the most interesting questions was about licensing.  An artist told me that she was familiar with the Creative Commons scheme but she really wanted to earn some money from her work.  She asked whether there were any schemes like Creative Commons that generated revenue.  I told her that there were indeed associations of copyright owners that licensed their work on standard terms and distributed the royalties or licence fees to their members.  She could check out some of them but if none of them suited her she could instruct a lawyer to draw up a licence agreement.  

In either case, I stressed the advantage of inserting a copyright notice on her work or its mounting or container to put third parties on notice that copyright subsisted in the work and that she owned that copyright.   This consisted of the word "copyright", an abbreviation or the "©" symbol, the year in which it was created and the name of the copyright owner.  For example, I took the photo of M-SParc that appears at the topic of this article when I attended the Anglesey Business Festival in October 2018.  It will be seen that I have inserted the symbol, year and my name.

Associations of copyright owners that license the use of their work on standard terms are called "collecting societies".  Most people will have heard of the Performing Rights Society ("PRS")  and the Mechanical Copyright Protection Society ("MCPS").  They may have seen their decals "PRS for music" in pubs, cafés and gyms.  They draw up terms for the licensing of their members' works and visit premises that are likely to need their licences to collect the appropriate fees and royalties. Businesses that fail to cooperate may be sued.   They instruct specialist solicitors and counsel and nearly always win their claims.

Although the PRS and MCPS are probably the best-known collecting societies, other societies exist for other copyrights and related rights.  Wikipedia maintains a List of Copyright Collecting Societies from most parts of the world including the United Kingdom.  Freelance writers, for example, might wish to check out The Authors Licensing and Collecting Society ("ALCS").   Artists may want to contact the Artists' Collecting Society ("ACS").   Although it is not strictly a collecting society, designers should be aware of ACID (Anti Copyright in Design) who protect designers and makers against unauthorized copying and dealings with their designs.

Many of these organizations have reciprocal arrangements with foreign collecting societies.   They can help to protect IP owners' works and revenue not just in the UK but in many other markets around the world.

Although collecting societies and similar organizations are great for authors and designers they are not necessarily good for consumers and other users because they create monopolies and impose conditions that some consider to be unnecessarily restrictive.  Licensing schemes are therefore regulated by Chapter VII of Part 1 of the Copyright, Designs and Patents Act 1988.   Some users such as broadcasters and universities are also very powerful and they may challenge a licensing scheme under the Act.   A body known as the Copyright Tribunal resolves disputes between copyright owners and users under Chapter VIII of Part 1.   One case that might interest Welsh speaking readers is BBC v EOS  17 Feb 2021.

Sofie Roberts has invited me to speak at a seminar on licensing for the North Wales creative network on 19 April 2021.   If Covid 19 infections reduce sufficiently to allow M-SParc to reopen it will be great to deliver this talk in person.   If not, I shall deliver it over the internet.   Anyone wanting to discuss this article or any point arising from it may call me on 020 7404 5252 during office hours or send me a message using my contact form.

Intellectual Property for Startups and other Small Businesses

IP for Start-ups and other Small Businesses from Jane Lambert

Last Friday I was invited by Business Wales to lead a seminar on Intellectual Property for Startups and other Small Businesses at the Beacon Enterprise Centre.  I had a very mixed audience that included an academic operating a social network, a branding consultant, a components' supplier, information technology consultants, a software developer and a solicitor.

As it was a Friday afternoon and my audience was quite a small group I decided not to subject it to a Powerpoint lecture but to ascertain the sort of issues that had arisen in their business, analyse those issues and finally resolve them. It became clear that most of those issues related to branding, trade secrets and confidentiality and copyright.  Nobody was interested in a patent though some were not aware of the fact that they had developed protectable technology

To assist my audience and similar businesses elsewhere, I have uploaded my slides and handouts to Slideshare.   The slides are available above.   The handouts are accessible through the following links:

• Patents
• Trade Marks
• Registered Designs
• Copyrights and Related Rights
• Trade Secrets, and
• Passing off.

I also showed the audience this website and its relation to my main website at NIPC Law.

Anyone wishing to discuss this presentation or any of the handouts should call me on 020 7404 5252 or send me a message through my contact page.