Intellectual Property as a Superior Investment Model for Startups: A literature review

Traditional startup investment models rely on capital-based equity financing, exposing investors to operational risks and market fluctuations. However, intellectual property (IP)-backed investment models offer an alternative approach by securing ownership in intangible assets rather than the business itself. This literature review examines the advantages of IP-based investment, comparing it to conventional equity financing. The study explores key themes, including valuation methodologies, revenue streams, risk mitigation strategies, and investor protection mechanisms. The findings suggest that IP-backed investments provide greater security, stability, and financial returns while offering a flexible exit strategy for investors.