What Happens to IP When You Sell?
When selling a business, intellectual property is more than just logos and trademarks—it’s the DNA of what makes your company valuable. Buyers look closely at IP to assess risk, protect their investment, and confirm that what makes your business unique will transfer after closing.
In this video, Kirk Michie breaks down how IP fits into a transaction, why it matters for valuation, and what founders should do in advance to avoid costly surprises.
What Happens to Intellectual Property When You Sell Your Company?
For many founders, intellectual property (IP) is one of the most overlooked—but most valuable—parts of a business sale. While revenues, customers, and cash flow often dominate the conversation, IP is a critical asset that buyers evaluate carefully in M&A transactions.
Defining Intellectual Property in a Deal
In the context of a business sale, IP includes more than patents and trademarks. It covers your brand, website, business name, proprietary processes, and any other intangible that differentiates your company. Buyers see these assets as central to both risk management and long-term growth potential.
Why IP Matters for Valuation
Well-protected IP can enhance valuation by demonstrating clear ownership and defensibility. Conversely, poorly documented or disputed IP rights can reduce value or even jeopardize a transaction. Founders should take steps in advance to document ownership, register trademarks, and ensure employee or contractor agreements properly assign rights to the company.
What Buyers Expect
In due diligence, buyers will confirm that your IP is transferable and free of encumbrances. This often involves reviewing domain registrations, contracts, licensing agreements, and any pending disputes. Clean records provide confidence that the buyer will fully own what they’re paying for.
Steps for Founders
Audit your IP assets early
Ensure legal ownership and registrations are current
Clarify contractor and employee agreements
Work with legal advisors to resolve issues before going to market
Intellectual property is more than an afterthought—it’s a cornerstone of what makes your business valuable. By addressing IP issues before a sale, you not only reduce deal risk but also strengthen your negotiating position.
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