Tech start-ups and insolvency

Tech Startup

The tech industry has its fair share of major successes but it still remains an industry with a high rate of insolvency. So, what can tech start-up founders do to protect themselves, their businesses and ideas from an uncertain future? 

Tech companies by their nature are built on ideas ; think Uber, Facebook and so on. So the most valuable part of the business is usually the IP.  Founders who are savvy enough to protect IP early on are likely to build better foundations to their business than those who fail to recognise that IP is probably the most valuable asset they possess. 

IP can not only secure funding to take the business onto another level, it can also save a business when things are not going so well. 

Putting in place measures to protect IP and its commercialisation from the outset can save a lot of problems later on. Trying to secure it after it has been compromised will inevitably prove to be more difficult and expensive than most small businesses can cope with. 

Of course IP may not always be in the hands of the founders. It could be owned by third party software the business makes use of or it can even be open source. In both cases it is worth reviewing licencing and disclosure obligations. 

Failing to do this means it will be difficult to obtain funding from investors who will want to see such agreements in place. 

If you think your business may be in danger of insolvency, please contact a member of our Insolvency team today.