What patents are used as collateral?—An empirical analysis of patent reassignment data

Fischer, Timo; Ringler, Philipp

doi:10.1016/j.jbusvent.2014.04.002

Cited by 59 publications

(41 citation statements)

References 56 publications

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“…Kim &Lee (2007) take a macroeconomic approach, using as a measure of innovation the number of patents registered. It is observed that patent growth is positively influenced by a better developed financial sector (Fischer et al, 2014), for the developing countries studied. From these studies, it can be concluded, on a micro as well as a macro level, that finance is of positive influence on innovation (Hottenrott et al, 2016).…”

Section: Theoretical Frameworkmentioning

confidence: 88%

The Effects on Innovation from Financial Sector Development: Evidence from Developing Countries

Kapidani¹,

Luçi²

2019

JOC

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The subject of financial system development is widely studied in the finance literature as an indicator of economic growth and a driver of technological innovation supporting the mobilization of capital for growth. However, varying results are obtained when examining developed countries compared to the emerging countries. Developing countries are characterized by a lower investment in innovation, and lower levels of competitiveness in terms of research and development funding, fewer research academic institutions, but also lower incentives for private innovation by enterprises. The purpose of this paper is to examine the relationship between financial development indicators and innovation by analyzing data for 15 developing countries within the time frame of 1996-2016. The financial system is analyzed in two main pillars: credit institutions and equity markets. The number of innovation patent applications is the dependent variable of the study, i.e. as an indicator of a country's innovative performance. The results of the study show that a higher level of crediting by the banking sector will positively affect the number of patent applications. Credit mobilization by other financial intermediaries in the financial system such as equity markets or non-banking institutions show a lower efficiency in boosting innovation activities, resulting in the opposite effects regarding the number of patent applications. Countries with a higher level of education will show more efforts toward innovation and the development of innovative practices. On the other hand, higher competitiveness among companies in terms of technology innovation and processes is expected to boost the demand for funds in the financial system, leading to the improvement in system development.

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Section: Theoretical Frameworkmentioning

confidence: 88%

The Effects on Innovation from Financial Sector Development: Evidence from Developing Countries

Kapidani¹,

Luçi²

2019

JOC

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“…IP-backed debt funding allows firms to exploit the economic value of their IP to obtain loans from banks or other financial institutions (Fischer and Ringler 2014). IP rights can indeed be exploited as a source of capital collateralized by the stream of revenues deriving from licensing or royalty agreements, which typically involve portfolios of copyrights or patents.…”

Section: An Overview and Comparison Of New Players In Entrepreneurialmentioning

confidence: 99%

“…As firms tend to patent more, IPbased financing instruments such as patent-based investment funds become available and can be an option for IP-based start-ups and growth ventures to fund their operations. Moreover, patents can be used as collateral to obtain debt funding from banks and other financial institutions (Fischer and Ringler 2014).…”

Section: Product Market-related Factorsmentioning

confidence: 99%

New players in entrepreneurial finance and why they are there

et al. 2017

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The landscape for entrepreneurial finance has changed strongly over the last years. Many new players have entered the arena. This editorial introduces and describes the new players and compares them along the four dimensions: debt or equity, investment goal, investment approach, and investment target. Following this, we discuss the factors explaining the emergence of the new players and group them into supply-and demand-side factors. The editorial gives researchers and practitioners orientation about recent developments in entrepreneurial finance and provides avenues for relevant and fruitful further research.

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“…Most high growth potential start‐ups, however, do not hold tangible assets. Their most likely tradable asset is their intellectual property, in particular patents (Mann, ; Fischer and Ringler, ).…”

Section: Determinants Of the Venture Lending Decisionmentioning

confidence: 99%

Venture Debt Financing: Determinants of the Lending Decision

Rassenfosse

Fischer

2016

Strategic Entrepreneurship

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Research summary: Venture debt lending is a form of start-up financing that lies at the intersection of venture capital and traditional debt. We analyze the lending decision criteria of 55 senior U.S. venture debt lenders (VDLs) using a discrete choice experiment in order to understand how VDLs overcome barriers that traditionally hamper start-ups' access to debt. We find, first, that the provision of patents as collateral is as important as the provision of tangible assets to lenders. Second, VDLs showed a marked preference for start-ups that offered warrants. Third, venture capitalists' backing substitutes for a startup's positive cash flows.Managerial summary: This article provides insights into the business model of venture debt lenders. Venture debt is an equity efficient way to raise money: it limits equity dilution by prolonging runways and allowing entrepreneurs and investors to raise equity at the next funding round at a higher valuation. The research suggests that venture debt plays an important role in new venture financing, with about one venture debt dollar provided for every seven venture capital dollar invested. It further suggests that backing by venture capitalists (VCs) and the provision of patents as collateral significantly increase the chance of obtaining venture debt. Therefore, it provides additional rationales for having VCs onboard and for applying for patents. More generally, the research illustrates that debt, in the form of venture debt, is available to start-ups with negative cash flows and no tangible assets.

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What patents are used as collateral?—An empirical analysis of patent reassignment data

Cited by 59 publications

References 56 publications

The Effects on Innovation from Financial Sector Development: Evidence from Developing Countries

The Effects on Innovation from Financial Sector Development: Evidence from Developing Countries

New players in entrepreneurial finance and why they are there

Venture Debt Financing: Determinants of the Lending Decision

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