We have had many employees and contractors write code, design products, and create marketing assets for us over the years, but we do not have signed IP assignment agreements for everyone. How do we audit and clean up our intellectual property ownership on our exit runway so this does not stall due diligence?

Question

Tyler Smith · Accepted Answer

Intellectual property issues are a silent deal-killer. During due diligence, a buyer's legal team will inspect every piece of proprietary technology, code, and design you claim to own. If you cannot prove that every employee, contractor, and agency who touched your intellectual property has signed a formal invention assignment agreement, the buyer will pause the deal or demand a massive price reduction.

You must clean this up years before you go to market. Start by conducting a comprehensive IP audit. Identify every piece of software, brand asset, product design, and proprietary methodology your business relies on.

Assign a quarterly Rock to your Integrator or legal counsel to audit your personnel files. Check for signed intellectual property assignment agreements and non-disclosure agreements for every current and former employee and independent contractor.

If you find gaps, you must address them immediately. Have your legal counsel draft retroactive assignment agreements and reach out to those former contributors to secure their signatures. For current employees and contractors, make these agreements a non-negotiable condition of their ongoing relationship.

To prevent future gaps, build this legal verification step directly into your HR onboarding process. Document this workflow in your core HR process so it is followed consistently by your team.

By systematically securing your intellectual property rights on your exit runway, you eliminate a major legal risk. You can hand the buyer a clean bill of health during due diligence, proving that your proprietary assets are fully owned and fully protected.