Walking into the room with IP: exploring start-ups’ IP licensing strategy

Abstract

PurposeThe purpose of this paper is to explore the trends and features of one of the most visible intellectual property (IP) management practices, IP licensing, in the context of start-ups, accessing external technology at the outset of their lifetime. In particular, it compares start-ups and incumbent firms, in terms of licensing strategy pursued, role of in-licensed technologies relative to the internal innovation process and successively implemented IP management strategies.Design/methodology/approachA mixed-method study is presented using quantitative data on licensing deals from the US Securities and Exchange Commission and cases on start-up companies involved in inbound technology licensing.FindingsEvidence indicates start-ups have different IP licensing strategies than incumbents, and their successive IP management strategies are more flexible than for incumbents.Originality/valueThe authors shed light on IP licensing, which is gaining momentum in open innovation (OI) settings, in an understudied segment of SMEs, namely, start-ups. The authors display interesting evidence of the portion of start-ups that license-in from external companies, indicating that this practice is more widespread than literature would suggest; the authors demonstrate that licensing-in is a valuable strategy for start-up companies, possibly providing additional channels for acquiring know-how on the market. The authors therefore contribute to, and advance, entrepreneurship, IP and OI literature.