When you're getting a business off the ground, the list of must-haves and do-immediatelies seems to grow exponentially. Some things can't wait (keeping the lights on, managing payroll), while others are goals to work toward (cold brew on tap in the kitchen). There's one item that shouldn't wait at all, though, and any entrepreneur should get going on it as soon as it's finalized.
Researchers have just presented a paper to the Financial Management Association about the importance of nailing down a trademark when starting a business. Top concern usually goes toward patents, and while those are key for protecting intellectual property, a trademark "allow startup firms to differentiate their products and generate customer loyalty through advertising," according to a press release from LeHigh University. "Because they are costly to acquire and maintain, trademarks may also signal the intention and ability of a firm to launch and continue a new product line, serving as a credible signal of firm value to investors."
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In other words, investing in your trademark right away signals to potential funders that you mean business and you're here to stay. Of course, it does always pay to temper your optimism with a realistic outlook — but in the world of entrepreneurship, you don't have to be a unicorn; you just have to be you. Ultimately, if you're looking to play up your experience and nail some seed money or more, having your brand identity firmly in place from the word go will send you far. As the research team puts it:
"We find that the number of trademarks held by an entrepreneurial firm is associated with a greater VC investment amount spread over a smaller number of financing rounds, a greater probability of successful exit, higher IPO and secondary market valuations, greater institutional investor IPO participation, smaller post-IPO equity market information asymmetry, and better post-IPO operating performance."