IP: the complete checklist before selling your tech asset

The most costly mistake in tech M&A is not bad timing or an overambitious valuation. It is the late discovery of an IP gap that collapses the deal, or the valuation, 15 days before closing.

The 5 IP questions every acquirer will ask

• Who actually owns the rights to the code? If freelance contractors contributed to the codebase without rights assignment contracts, the intellectual property is partly theirs, not yours.
• Is the trademark filed? An unprotected asset name can be registered by a third party in another country. Brand value disappears if it is not anchored in an IPI, EUIPO, or USPTO filing.
• Are open source licences compatible with a commercial sale? A GPL library in your codebase can impose source code disclosure obligations on the acquirer.
• Do third-party APIs have proper contracts? A critical dependency on an API without a formalised contract is an operational risk the acquirer will discount.
• Do user data belong to the asset or to the founder? The GDPR question of data ownership during a transfer is complex and poorly anticipated.

The 12-point pre-sale checklist

• Rights assignment contracts signed with all contractors who contributed to the code
• Verbal trademark filed in the principal country of operation
• Trademark extension in progress or complete (EUIPO, WIPO depending on ambition)
• Open source licence audit (recommended tool: FOSSA or BlackDuck)
• Formalised contracts for all critical third-party APIs
• Up-to-date GDPR privacy policy and DPA signed with sub-processors
• User data documentation: nature, volume, location, retention period
• Data transfer agreement provided for in the SPA (Article 28 GDPR)
• Domain name owned by the legal entity selling (not by the founder personally)
• Technical accounts (GitHub, AWS, Stripe, etc.) dissociated from the founder's personal account
• Secrecy and confidentiality: existence of a documented trade secret if applicable
• Complete and accessible version history (clean Git log, no destructive force push)

“The IP dimension represents 25 points out of 100 in the Aegryn Grade protocol. It is the dimension that generates the most reservations during certifications, and the easiest to anticipate.”

— Aegryn Grade Protocol

What Aegryn certification reveals about IP

The most common gaps identified during certifications: absence of contractor rights assignment (43% of submitted assets), unfiled trademark (61%), and undocumented GPL open source dependencies (28%).