50% of Venture Capital Investment is Lost: How Your Clients Can Improve These Odds Using the Right Patent Analytics

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If you are a counselor of venture capital firms or entrepreneurs who owning start-up companies that are targets of venture capitalists, you might already be familiar with the high rate of failure associated with such investments. Nonetheless, you may be surprised to find out that 50% of all money invested in venture capital is a loss. This figure indicates that the actual return on venture capital investment is not much different from the average annualized returns on the smallest NASDAQ stocks. This 59% figure certainly does not reflect the investing public’s general perception that venture capital return on investment markedly outweighs what one can obtain on the stock market. And, it is this apparently erroneous assumption of perceived higher return that presumably justifies the higher risks your venture capital and entrepreneurial clients associate with venture capital.

It appears that there is much room for improvement in your venture capital clients’ investment decision-making, as well as the quality of entrepreneur's decisions regarding their start-up companies. As an IP Business Strategist and Consultant, I am a strong advocate of using knowledge and information to reduce risk and improve the rate of return on investment. I firmly believe that venture capitalists, and entrepreneurs who are seeking venture capital investment, can improve the quality of their business and investment decisions by collecting and analyzing business information available in published patent data. This article provides counselors of venture capitalist firms and owners of start-up companies with practical advice on how to use patent analytics to improve the payback of their investment decisions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jackie Hutter, IP Strategist, The Hutter Group LLC: IP Business Strategy | Attorney Advertising

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