The High-Cost of Information… and What It Means for Entrepreneurs
“The U.S. patent system adds the fuel of interest to the fire of genius in the discovery and production of new and useful things.” – Abraham Lincoln
In this piece, we aren’t identifying the cost to attain information regarding a specific topic. Rather we are diving into the idea that intellectual property is valued at such a high-cost and can transform the world through entrepreneurial ventures. Intellectual property often requires substantial investment to develop and can include software code, nanoparticles, pharmaceuticals, gene therapy and more.
Intellectual property can advance processes and help or heal tens of thousands of people, if not more. Besides helping the population, the potential revenue and profits from manufacturing and selling a new product can generate millions of dollars. And, once a product is commercialized, the entrepreneur could then work to create additional therapies or products, or even license to companies to increase profits exceedingly.
Domestically, patents cost at least $10,000; internationally, patents reach costs of up to $100,000 and sometimes even higher. Given the cost of patents, it takes a unique, scalable idea for an entrepreneur to pursue such an avenue. Once a patent is secured, the intellectual property is granted exclusive use by the owner for on average 20 years.
These modern technologies require significant amounts of funding but are so highly specialized and intangible there is no viable collateral to support the needs of loan applications (debt financing) which require hard assets. To attain a patent alone, entrepreneurs would need to have significant savings, investment from friends and family, or possibly attain a loan to afford the filing. After the patent was secured, the entrepreneur would need immense amounts of capital to manufacture and commercialize their product for market.
The dilemma is entrepreneurs need money to develop their product; but, to secure funding often there already needs to be a product. Money is the catalyst for entrepreneurship.