After years of advising VC-backed AI companies through fundraising rounds, patterns emerge in what sophisticated investors expect from IP strategy. It's not just about having patents—it's about having the right patents, documented properly, with a clear connection to your business model.

The Due Diligence Checklist

When VCs evaluate AI startups, IP due diligence typically covers several key areas:

• Patent coverage: Do your patents actually protect your core technology, or just peripheral features?
• Claim quality: Are claims written broadly enough to matter but specifically enough to be enforceable?
• Inventor assignment: Is there clean documentation that all inventors have assigned their rights to the company?
• Prior art exposure: Are there obvious prior art references that could invalidate key claims?
• Freedom to operate: Does the company face infringement risk from competitors' patents?

Beyond the Patent Count

Sophisticated investors see through vanity metrics. A portfolio of 50 weak patents is worth less than 5 strong ones covering fundamental innovations. What matters is strategic coverage—patents that protect the specific innovations driving your competitive advantage.

Investors also look for signs of IP sophistication: regular invention disclosure processes, documented innovation pipelines, and patent strategies that align with product roadmaps.

The Funding Stage Matters

IP expectations vary by funding stage. Seed investors understand that early-stage companies won't have issued patents—but they do expect to see provisional applications covering core innovations and a plan for building a portfolio.

By Series A, investors expect filed non-provisional applications and evidence of a systematic approach to IP development. By Series B and beyond, they want to see issued patents and a portfolio that creates meaningful barriers to competition.

Common Mistakes to Avoid

• Publishing research papers or open-sourcing code before filing patents
• Filing patents that don't cover the actual commercial implementation
• Neglecting inventor agreements and assignment documentation
• Focusing only on US patents when your market is global
• Treating IP as a legal checkbox rather than a strategic asset