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Startup Funding Paperworks
Did you know that 90% of startups that have IP protection raised funding successfully? IP is any form of original creation that can be bought or sold. IP is protected by legal rights such as patents, trademarks, industrial designs and copyright. These are few simple and cost-effective ways of protecting your ideas and your business. This article will help you understand the strong positive correlation between IP Rights and Fundraising.

Presence of IP Assets (Patents, Trade Marks, trade secrets, domain names etc.) helps in
  • Adding value to improve the competitiveness;
  • Improving sustainability by ensuring freedom to operate, and keeping at bay unscrupulous competitors
  • Developing relationships with employees, consultants, suppliers, subcontractors, business partners and customers
  • Obtaining funds.
What Investors seek before committing capital?
  • Competitive: Patentable Subject matter in your idea
  • Right to Commercialize: Manage risks of infringement of Others IP (Freedom to Operate)
But, how does IP correlate with Funds Raised?
  • Improve Valuation to get funding or get acquired
  • Improve Contribution margin from early sales, thereby needing fewer investment funds
  • Even if business fails, the patents may have value for acquiring company
  • Defend itself against attacks for IP infringement by rivals
  • Negotiating Tool in Joint Development, Customer-Supplier Relationship, Avoid Price War (Commodity)
Most obviously, a startup with strong patent protection will have a higher exit value, i.e. the value when listed on a public market or sold in a trade sale. Loop with IP, Funds, and Startups
  1. The higher value is a premium paid for a startup with high gross margins that results from the degree of patent-enabled monopoly protection for its products and services.
  2. Based on patent-enabled monopoly rights, startups that have good patent portfolios accrues larger contribution margin from their early sales, and thus need to raise fewer investment funds in order to further promote their own growth by investment in R&D, marketing, and company enablement.
  3. For investors in start-ups, typically venture capitalists, patent portfolios also represent downside protection. Even if a startup happens to fail (runs out of cash or breaches debt covenants), the company’s patent portfolio can sometimes be sold, licensed or enforced, in order to recover some of the original investment.
  4. A Venture Capitalist only gets to share in the profits when the whole fund is profitable, hence it is very important to get capital back from the startups that fail since this helps the entire fund to move towards profitability. Thus for a startup, this means that seeking investment from professional investors usually means committing to creating a patent portfolio.
  5. A patent portfolio represents downside protection for founders and staff of a startup as well. This means that, even if the business fails, the startup may have value to an acquirer (say a competitor) because of the patent portfolio; this can afford founders and management (who have to negotiate such deals and be rewarded for doing so) some exit value.
In many cases, a startup does not only sticks to the original business plan. As a startup develops, it finds new opportunities, encounters different problems, and has to deal with a rapidly changing and competitive environment. Having a patent portfolio provides a startup with more strategic choices when a change of direction is required. IP Infringement is not new and not only a headache for Small Startups. From Edison losing the IP suit for Bulb to the dispute of Invention of Telphone between Elisha Grey and Graham Bell, From Bajaj & TVS to that of Apple and Nokia, one thread linking all is that one who filed for Patent first and able to commercialize the Idea won the race.

If you are reading this, then you sure have a plan, let’s connect and figure out opportunities for you.

Sometimes it is the solution. Mutual Consent is the term used when both the parties agree to a peaceful separation. It is a simple way of coming out of the marriage and dissolving it legally. The important pre-requisite here is the mutual consent of the husband and wife. There are two things the husband and wife must come to a mutual agreement about Maintenance or alimony. As per law, there are no maximum or minimum limits to alimony or maintenance. There may be a figure or there may not be one; The second issue is the custody of the children (if there are any). This, too, can be worked out efficiently between the parties. Child custody in mutual consent divorce can be shared, joint or exclusive depending on the understanding of the spouses.

When can such a divorce be filed?

Husband and Wife intending to dissolve the marriage are required to wait for at least 1 year from the date of marriage before they file for divorce. They have to show that they have been living separately for a period of one year or more before the presentation of the petition and during this period of separation, they have not been able to live as husband and wife.

Where to file the petition?

The petition for divorce can be filed in the Family Court of the city/district where the couple lived together for the last time, which was their matrimonial home.

Are there different laws of divorce for different religions in India?

Yes. There are different laws of divorce for different religions in India. Hindus (inclusive of Sikhs, Buddhists, and Jains) are governed by the Hindu Marriage Act, 1955. Christians are governed by the Indian Divorce Act, 1869 and the Indian Christian Marriage Act, 1872. Muslims are governed by Personal Laws of Divorce and also the Dissolution of Marriage Act, 1939 and The Muslim Women (Protection of Rights on Divorce) Act, 1986. Similarly, Zoroastrians are governed by The Parsi Marriage and Divorce Act, 1936. There is also a secular law called the Special Marriage Act, 1954.

What happens in court?

The divorce petition is in the form of an affidavit, which has to be submitted in the family court. After the filing of the petition and recording of statement of both husband and wife, the court will generally adjourn the matter for a period of 6 months. After this period of six months, the couple has to make another appearance in court for making a second motion confirming the mutual consent filed for earlier. It is only after this second motion that a decree of divorce is granted by the court.

Can one party withdraw the mutual consent petition after filing in the court? If so, what happens next and what can the other party do?

When the divorce matter is pending in the court for the period of six months, the partners are fully entitling to withdraw the petition (whether together or separately) by making an application to the court saying that he/she no longer wishes to seek divorce by mutual consent. Here, the court will not grant a decree of divorce. In the case where one party withdraws his/her petition, the other party has no option but to file a formal petition for divorce under the provisions of Section 13 of the Hindu Marriage Act, 1950. In such a situation, a divorce will only be granted on certain specified grounds such as cruelty; desertion; voluntary sexual intercourse with another person; the other spouse being of unsound mind; conversion of religion by the other spouse; leprosy; venereal disease; a spouse having renounced the world or if he/she has been missing for a period of 7 years or more.

Can the spouse consent for remarriage without getting a divorce from the existing partner?

Remarriage without getting a divorce is an offense punishable under the law with a punishment amounting to 7 years of imprisonment.

If nothing from the spouses is heard for a long time, should the decree for divorce be granted?

If there is proof of the absence of spouse without any information to the other spouse about his/her whereabouts for a continuous period of 7 years, a petition may be filed in court in this regard.

When can the divorced persons remarry?

This depends on the nature of the decree. If, after a period of 3 months from the date of the decree, no notice of appeal has been received by the party remarrying someone else.

Before taking the biggest leap in your life, why not we connect you to our best lawyers in this field that can provide you consultation on this matter? Happy to help, let’s connect!