The Role of Intellectual Property in Startup Funding: A Comparative Study of India, the United States, and China
Abhijeet 1, Abhinav N 1, Ankit Patil 1, D Rishikesh Reddy 1, Dr. Chitra B T*
*Assistant Professor, Industrial Engineerinng and Management, R V College of Engineering
1BE students, Department of Computer Science and Engineering, R V College of Engineering
ankit.p.patil06@gmail.com , Corresponding Author.
Abstract— This paper investigates the strategic role of intellectual property (IP) in shaping startup valuation and venture capital (VC) decision-making, with a comparative focus on India, the United States, and China. While IP is widely recognized as a signal of innovation quality and long-term value, its integration into funding strategies varies substantially across ecosystems. Drawing on cross-country data and institutional analysis, the study finds that Indian startups underutilize IP in venture negotiations despite the presence of policy frameworks that promote innovation and IP protection.
Key barriers in the Indian context include weak IP enforcement, limited founder awareness, and high costs of filing and maintenance. In contrast, the United States demonstrates institutional maturity, where IP is embedded into valuation models and due diligence practices, while China leverages top-down incentives to drive large-scale IP generation, albeit with ongoing quality concerns.
The paper offers targeted policy recommendations to bridge the gap in India: improving enforcement efficiency, embedding IP training in startup support systems, expanding financial assistance for IP development, and integrating IP metrics into public and private funding assessments. These findings contribute to the literature on entrepreneurial finance and innovation policy and offer actionable insights for stakeholders aiming to enhance the signaling value of IP in India’s startup ecosystem.
Keywords: Intellectual Property (IP), Venture Capital (VC), IP Signaling, Startup Valuation, Innovation Ecosystems, Comparative Innovation Policy, India–U.S.–China Analysis, Deep-Tech Startups, IP Enforcement, Information Asymmetry, Technology Commercialization, IP-Backed Financing.
