Do Patents Really Help Startups Raise Funding? Evidence from the U.S. and Europe

When founders talk about fundraising, intellectual property often feels like an afterthought. You’ve got traction, a vision, and maybe even early revenue—so do patents really matter when it comes to convincing investors?According to multiple studies in both the United States and Europe, the answer is clear: yes, patents significantly increase your odds of attracting funding. In fact, the data show that both patent applications and grants play a role in signaling quality, unlocking capital, and driving startup growth.

Patents as a Signal to Investors

The National Bureau of Economic Research (NBER) studied how patents influence venture capital. Their findings? Simply filing for a patent application strongly predicts whether a startup secures VC backing. Once you control for applications, having the patent granted adds less additional signal, but the act of filing itself already makes investors take notice [NBER].That makes sense—applications show investors you’re serious about protecting your technology and creating defensible value. Even if a patent isn’t granted yet, the filing signals a founder’s foresight.

The Impact of Your First Patent

Researchers Joan Farre-Mensa, Deepak Hegde, and Alexander Ljungqvist dug even deeper into what they call the “patent lottery.” [Hartline] They found that when a startup’s first patent is approved, it experiences:
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     • 53% greater probability of attracting venture capital

     • 36% higher employment growth over five years

     • 51% higher sales growth over five years

These effects were most pronounced for early-stage and less-visible startups—precisely the kind of companies that need strong signals to stand out [NBER Digest].

USPTO Data: Patents as Collateral

The U.S. Patent and Trademark Office (USPTO) has also confirmed the fundraising benefits of patents. In a 2022 report, they noted that when patents are used as collateral, venture capital funding rises by 76% over the next three years. They also found that startups receiving their first approved patent saw 55% more employee growth and 80% higher cumulative sales within five years, compared to their non-patenting peers [USPTO].

Patents aren’t just legal tools—they’re business assets that can be leveraged to secure capital and accelerate growth.

Europe Shows the Same Story

This isn’t just a U.S. phenomenon. The European Patent Office (EPO), in partnership with the European Union Intellectual Property Office, recently studied thousands of European startups. Their 2023 report found that:
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     • Startups with patent rights are 10 times more likely to secure venture capital funding than those without.

     • Having a mix of both patents and trademarks further boosts the likelihood of success with investors.

As the EPO summarized: “IP rights are a key factor for attracting funding and accelerating growth” [EPO].

Why This Matters for Founders

If you’re a technical founder, here’s what the U.S. and European research shows:

     • Patent applications alone matter. You don’t have to wait for approval before they start signaling value.

     • First approvals are a milestone. They can meaningfully change your odds of getting funded, hired, and acquired.

     • Patents can be financial assets. Beyond signaling, they can literally be used as collateral to unlock investment.

     • The effect is global. From Silicon Valley to Berlin, patents help startups stand out in the fundraising race.

For startups trying to raise in a competitive environment, patents are a proven way to strengthen your story.

Making Patents Accessible

At Idea Clerk, we believe every founder should have access to these advantages—without spending $10,000+ on outside counsel or waiting months to get started. That’s why our platform helps you go patent pending the same day, with filings aligned to the standards investors (and attorneys) expect.

Defensible IP is no longer just for big companies. It’s a tool you can use today to stand out, attract funding, and scale with confidence.