Understanding the need to protect a company’s Intellectual Property (IP) was made obvious in the movie The Social Network. But what is a company’s IP? How do you identify it and what do you need to do to protect it? This RABBIT Report covers a technology solution that is helping startups and SMEs identify and protect their IP so that they can check off this important diligence item.
Sector: White Space
Location: Phoenix, Arizona USA What problem is Traklight solving?
Intellectual property (IP) is a company’s most valuable asset, representing more than 90% of a startups’ value and 80% of a mature company’s. Most entrepreneurs don’t understand what their IP is, how to identify it or how to protect it. Small or large, companies of all sizes misunderstand or ignore the important business and legal issues when it comes to IP. This can lead to serious negative impact on their valuations and ability to grow. On the flip side, Investors performing diligence on companies’ waste time prospecting when they realize a company hasn’t protected its IP and advisors waste time advising clients on these routine business items.
From Day One, most businesses do not understand the important business and legal steps that are necessary to identify, protect, and leverage intangible assets. One in three companies do not own their IP when they go to fundraise and it’s not because they did not file patents – often it’s simple missteps at the start, like publicly disclosing inventions or failing to have written agreements. Traklight sheds light on this often confusing part of the balance sheet and mitigates this risks for entrepreneurs and investors in a fast, efficient and affordable way.
How does it work?
“Our cloud-based platform is like a Turbo Tax for risk and IP identification,” says CEO Mary Juetten. “Entrepreneurs are guided through a checklist and do not have to know anything about starting and running a business or IP to complete the questionnaire and receive a risk assessment, strategy report, and IP roadmap.” Traklight’s platform is dynamic, meaning business owners can update and manage risk as their business grows. Users can start with a free business risk assessment and upgrade to the paid portion. They also have a series of Vaults that provide time-stamped encrypted storage and sharing of documents, IP, and due diligence information – a great service for when a company is going through an audit or raising funds. Their basic version is free and they have affordable, unlimited user versions for teams, due diligence, and deals. Companies can build up their documents once and share with advisors as they grow. Traklight partners with firms that can help take the IP that has been identified and lock it up with legal protections.
Who are the founders?
Mary Juetten considers herself “an entrepreneur, executive, writer, speaker and mentor.” She has dedicated more than 25 years to helping businesses achieve and protect their success. Juetten holds a law degree and professional accounting designation. She has a background as a public and private business leader. Juetten created Traklight, when she saw an opportunity in the market to be the “only self-guided software platform that diagnoses business risk and identifies intellectual property.” She built a team that includes Shay Harding their VP Technology and Mike Willee, Operations Coordinator.
Last year, Juetten co-founded Evolve Law, an online community of entrepreneurs, law firms, attorneys and technology companies to accelerate the pace of adoption of technology within the offline and antiquated legal industry.
What can you tell us about early traction/user experience?
According to Juetten, “Our current platform is version 3 of our software that launched in March 2014. We took 18 months of feedback and experience from 500 users of the first and second versions of the product. This included close to 100 attorneys. We discovered that not everyone wanted to read a report, so we developed an assessment grade, interactive risk chart and visual graph for IP that allows companies to address risk and capture valuable assets as they grow.” Juetten claims that user feedback has shown that Traklight has saved money and increased company value by identifying areas for improvement and IP. They have case studies on their website and testimonials and are continually iterating on the platform, adding questions and improving their offering.
Traklight Pro™ was launched as a white label version for law firms, CPAs, consultants, legal plans like Rocket Lawyer and LegalZoom and companies that serve entrepreneurs like Efactor and Paychex. They have over 100 of these partners who offer the platform to their clients as education and lead generation.
What are the risks facing the company?
Like any other business, they run the risk of having others copy them but feel confident of their market position by iterating and incorporating the input from hundreds of professionals and over a thousand entrepreneurs that have used the platform over the past 4 years. And as Juetten says, “we have protection on our IP!”
What is CCV’s Perspective?
Entrepreneurs often skip over protecting their IP either until they have to raise money or someone walks off with it. In the first case, forgetting to protect one’s IP might derail a company’s ability to raise funds until they have the proper protections in place. If a company is low on cash a significant delay to protect their IP could be the difference between life and death. In the latter case, investors want to know that the money they put into a company won’t disappear if someone walks off with the IP behind the company they invested in. As more private companies come online seeking capital, the often misunderstood or ignored process of IP protection will become more relevant and products like Traklight can help streamline the process and mitigate the risks. Online platforms and investors alike that are doing diligence on deals will require IP disclosure to be completed before a company can seek investment. Given Trakight’s IP Vault, companies can easily store and share these files on a moment’s notice. Given the free entry point it is a no risk opportunity for any company and a smart starting point for people who don’t understand where to begin to identify their IP. As Juetten said, “You can’t sell something you don’t own.” A smart reminder for any company that has a future exit in mind.
If you are you an innovative company in the debt or equity crowdfunding space that we don’t know about yet? Let us hear from you right now!