(The) impact of patent characteristics on fundraising potential in biopharmaceutical startups

Abstract

Patents play a crucial role in the pharmaceutical industry, protecting intellectual property and enabling companies to raise funds. This study examines the relationship between patent ownership, patent characteristics, and fundraising outcomes in pharmaceutical and biotechnology startups. The analysis of 725 startups from Pitchbook reveals that having multiple patents positively influences the funds raised. In contrast, patent ownership does not significantly affect the size of the first deal. The study further explores the impact of patent characteristics, finding that the number of backward citations positively correlates with fundraising in the first patent application year and subsequent years. Additionally, the count of claims of patents positively relates to fundraising in the first patent application year. These findings shed light on the importance of patent ownership and specific patent characteristics in the fundraising process, providing valuable insights for entrepreneurs, investors, and policymakers in understanding factors that drive fundraising success in the pharmaceutical and biotechnology industry.