Attorney Chris Holt started PatentCore years ago to address pain points in a market that he was intimately familiar with: intellectual property.
With some early validations and customer traction, PatentCore aligned its data analytics SaaS ‘Patent Advisor’ product with REED Technology and Information Services, a division of LexisNexis.
Shortly into that relationship, REED swallowed PatentCore whole.
To what degree was acquisition part of the plan from the onset?
We were definitely looking in that direction all along. Our service is niche and it fits nicely with a large legal information company. There’s only a small hand full of those.
So yes, it had been our strategy to find the right long term strategic partner from day one, but we did not think it would happen this soon – it was either raise another round of investment to scale independently or do what we did.
How did you finance PatentCore?
It was mostly self-financed throughout it all (especially during the first few years of R&D phase). The business building phase over the past two years was through revenue generation, reseller agreements, and the support of one local angel investor.
How much were you bought for?
Millions of dollars? Beyond that we’re not going to disclose terms, but there’s a long term agreement in place.
What does it mean for the future of PatentCore?
We’re going to keep doing what we’re doing with the benefit of additional resources. Personally, I have a multi-year commitment and a new title – VP of patent analytics. Our team of about five here in the US will also be transitioning and there will be a lot of integration as we continue to work with our European team to develop new products and services. We have a deep pipeline and long roadmap.
In the information services industry surrounding IP law, the sweet spot has traditionally been litigation. There are very few useful tools that help patent applicants obtain better patents more efficiently. That is where we fit in. I recognized the opening early on and went for it. We have proven over the last two years that our hypothesis was a good one. We will continue to grow the opportunity quickly with the help of REED Tech.
What was the process of selling?
Looking back on the whole experience there were mistakes made that I’ve learned from. I think we were able to sell sooner because there was trust established through our relationship prior to the marriage. Otherwise, it definitely would have taken longer. The sales process was tough though, still. There was a lot of due diligence.
What are some takeaways?
Have one (or more) trusted advisors. We were able to retain a key executive who was a CFO on paper but he was so much more than a CFO in reality.
Have a plan. Know if you’re just looking to just get on base or hit a home run. My point is that if we were to stay in the game independently, I feel that we could have sold for more, albeit with more risk.
Have a mission. Our underlying mission is to make the process of obtaining a patent more efficient for all applicants. There are many opportunities to make money along the way. But reform is definitely part of our agenda, and that gives us a tremendous passion for what we are doing in this space.
Anything else you’d like to add?
I actually believe in taking as few risks as possible, which is contrary to the nature of entrepreneurship but it’s possible to be a conservative yet successful entrepreneur. In other words, don’t quit your day job on hope.