Angels in Pittsburgh

Cori Shropshire reports from the Angel Venture Fair:
Veteran investor Chester Fisher offers a glimpse into what "angels" really want. Companies, he said, must have a unique idea, a plan to protect the intellectual property behind that idea and a solid business plan that shows how they will market and sell products derived from their unique idea. "The whole purpose of these pitches is to get [investors] just interested enough to talk to the company and learn more," said Mr. Fisher, who was on hand to hear first-hand from hopeful companies at Thursday's fair. Mr. Fisher, who has invested in 15 to 20 local start-ups and with his partner, Tom Canfield, runs Squirrel Hill-based Equity Catalyst, an investment banking firm that helps young companies find money, said he was impressed by what he heard and saw.

And here I thought that the point of starting a company was to deliver products and services to customers who wanted to buy them. Seriously: I'm no business pro, but why start a company unless you have some pretty good sense of who your customers are? And intellectual property rights are no good unless they offer a meaningful barrier to entry. Your customers are yours only so long as you can keep them from becoming your competitors' customers.

Investors and entrepreneurs who put "intellectual property" at the top of their priority list are putting the cart before the horse -- and I say this as someone who practiced IP law and writes and teaches about IP law for a living. There are a lot of ways for a new company to establish and protect a market position, and intellectual property rights offer several. But "barriers to entry" is a broader and more important concept than IPRs (and I hate how corporate-speak reduces patent and copyright law to IPRs), and having customers is the most important concept of all.


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Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at] Mike also blogs at, on law and technology. Chris Briem of Null Space drops by from time to time.

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