Short version: For most AI companies, patents on “using AI for X” don’t protect you. They backfire by revealing your method while remaining practically unenforceable. The competitive advantage is in your data, processes, distribution, and customers—so protect those and build your business around the reality that competitors can do something similar. The uncomfortable truth about…

Strategic Partnerships are a polite way of saying “we don’t own the most important parts of our business.” Every founder loves to brag about their “strategic partnerships.” The name sounds impressive, but hides a glaring truth: We don’t own the most important parts of our business. Strategic partnerships are not a strategy. They are liabilities.…

Building a company that can be sold is building a different product for a different customer. Serving two masters – but they are compatible. The first master is the customer who buys your product, and the second master is the one who buys your company. Most entrepreneurs lose sight of the fact that the acquiring…

Nobody cares about your technology. Entrepreneurs love to talk about their technology. Endlessly. Ad nauseam. And when it’s time to raise money or sell the company, they make the same mistake: they lead with the tech. But here’s the truth: nobody buys technology. Not your customer. Not your acquirer. Not your investor. They buy a…

If you can’t explain why someone will pay 10x to buy your company, you’re not ready to raise a dime. When you’re raising outside capital — especially from angels or venture funds — you’re not just pitching your company. You’re implicitly making a promise: that their investment will turn into a significant return, typically a…

How “licensing-only” businesses can get caught in the angel/venture minefield. Let’s walk through the math that every angel investor does. This company is raising money at a 15 million dollar post-money valuation. For us as early-stage investors to justify that investment, we expect a 10x return. That means this company needs to exit at 150…

I recently heard a pitch from a startup with remarkable technology – a genetically modified seed that signaled when it’s under stress. Instead of waiting for crops to wilt, farmers could respond early, boosting yields. The data was strong. The science worked. But despite all that, I walked away unconvinced that the company was investable.…

We looked at a company who had been more or less steady-state for several years but wanted an infusion of cash. They were operating in two smaller markets without fully capturing either of the two smaller, midwest cities, but were coming to investors asking for additional funds. The business was a local service company, where…

How incompetent patent attorneys hide their work product from public view. Occasionally, I run into patents where the patent attorney talks the client into a non-publication request. This is always a bad thing. Non-publication requests keep your patent secret until the patent has been examined. The patent is confidential throughout the examination process, and only…

Due diligence is supposed to help investors and the entrepreneurs, but many times it is a charade. I am a member of several angel investor groups, and I am intimately familiar with many more. In general, angel investor groups can be a positive force for good: they teach entrepreneurs and angels how the investing system…