The German startup CrowdPatent, which was founded in 2013, created a pioneering platform connecting inventors, investors, and innovators. The platform presents inventions, patent applications, and patents with high monetization potential, and allows investors to financially participate in the success of the IP rights offered for investment.
Patents are tangible assets with low management overhead and – in comparison to venture capital investments, for example – have a manageable default risk. They offer a positive performance, good international sales opportunities, low administrative costs, the opportunity for high investment returns, wide-ranging diversification opportunities, and the accompanying minimization of risk. Through InventionShares, for the first time, CrowdPatent offers all investors an opportunity to invest directly in the realization proceeds of Intellectual Property rights.
The founder and CEO, Yorck R. Hernandez, is a German and European Patent Attorney having more than 12 years of experience in the patent field. We had a quick chat with him.
Is CrowdPatent just a niche crowdfunding platform or the next big thing in patent industry?
CrowdPatent is a pure investment platform, and not to be compared to common Crowdinvesting platforms. Investors invest into CrowdPatent owned assets, i.e. makes a contract with CrowdPatent. In contrast, common Crowdinvesting platforms usually act as an agent between third parties. CrowdPatent is comparable with the stock market, and this is why CrowdPatent issues so called InventionShares. For each campaign a limited number of InventionShares is offered and can be purchased by investors. The InventionShares define a certain share on revenues resulting from monetization of IP rights.
Who is CrowdPatent for?
CrowdPatent has 3 target groups. On the inventor side, CrowdPatent cooperates with research institutes, universities, SMEs, and single inventors On the investor side, CrowdPatent cooperates with usual Crowdinvestors as well as with strategic investors. On the innovator side, CrowdPatent cooperates with the industry. The CrowdPatent portfolio is here.
Isn’t it risky to publish a fundraising campaign before you have the patent?
Before publishing the campaign for investment, CrowdPatent files on its own costs and risk a so called provisional application. This gives the whole invention an official application date. According to patent law, this gives CrowdPatent a 12 months time window for collecting enough money for filing patent applications on this invention in as many countries as possible, wherein these patent applications will claim the priority of the provisional application, i.e. have the same filing date as the priority application.
What are your plans for 2016? You have been on the market for over two years … still bootstrapping?
We plan to expand to the US this year, since US is both a big patent market and a big Crowdinvesting market. In 2016 we aim to help funding 40 campaigns (inventions, patent applications, patents). We closed a seed round with 5 Business Angels, all from the patent field (lawyers, patent attorneys, industry).
Are investments in patents via your platform liquid?
CrowdPatent offers direct investments in goods which are tradable worldwide. IP rights can be sold and licensed anywhere in the world, patents are easy tradable goods. Anybody anywhere in the world can buy our IP rights. Prior to selecting IP rights, we do a thorough research with regard to potential buyers of the IP rights. Therefore, we create an exit scenario already prior to offering investments.