The following is from Ask The VC, where Brad Feld and Jason Mendelson of Foundry Group answer questions related to venture capital investment and startups:
Q: I've got a software startup that has a novel approach to solving a market problem. However, the solution stems from the nature of the process, not from the code per se. In terms of trying to finance the venture, would this necessitate getting enough funding to be first to market and just try to grab validation/market share before the copycats (especially those with deeper pockets) come around, or is there actually IP that can be protected within the design of the process?
A: (Brad) As a deep cynic about software patents and IP protection around process technology in software, my short answer is that it's better to go build the product (and the business) rather than spend your limited time and resources on the IP protection. My position is not a uniform one - many people would encourage you to put real energy and time into trying to protect your IP before you build the product.
In almost all situations I've encountered, I encourage the entrepreneur to just go build the thing. I continue to be amazed that the number of entrepreneurs searching for money who want me to sign a non-disclosure agreement before they will tell me what they are working on, or who think they have a truly novel (and non-obvious) approach to something where the patent is the key to the long term value of the business. There are lots of ways to protect your software ideas - the best way to do it is to get on with building something that it truly valuable for your customers.
Continue reading below
