---
title: "What Is Assignment of IP?"
term: "Assignment of IP"
description: "An assignment of IP is a legal transfer of ownership of intellectual property — patents, trademarks, copyrights, trade secrets — from one party to another. Startups must assign founder and contractor IP into the company before investors will fund."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/assignment-of-ip
---

# What Is Assignment of IP?

> An assignment of IP is a legal transfer of ownership of intellectual property — patents, trademarks, copyrights, trade secrets — from one party to another. Startups must assign founder and contractor IP into the company before investors will fund.

**Assignment of IP** is the formal conveyance of intellectual property rights from an individual or entity to another owner — typically from founders and contractors into the startup company.

## How it works

At incorporation, founders sign technology assignment agreements transferring pre-company inventions related to the business. Employees and contractors sign work-for-hire and IP assignment clauses in offer letters or consulting agreements. The assignments cover patents, source code, designs, domain names, and sometimes know-how explicitly listed or defined by scope.

Investors request an IP cap table or schedule in diligence listing registrations and confirming chain of title. Acquirers in [/glossary/asset-deal](/glossary/asset-deal) structures require the same package. Open-source compliance reviews run alongside assignment checks to ensure the company can sublicense what it distributes.

Assignments can be prospective (future inventions in scope of work) or retrospective (past work). Universities may retain rights to federally funded research, requiring a license instead of assignment.

## Why it matters

- **Founders:** Fix contractor gaps before the term sheet, not during closing week. Former freelancers who refuse to sign can delay or kill deals.
- **Investors:** IP representation and warranty in stock purchase agreements allocate risk if title is defective post-close.
- **Operators:** Maintain a single data room folder with signed PDFs and invention disclosure logs as headcount grows.

## Common mistake

Assuming incorporation alone puts IP in the company. Without signed assignments, founders personally own code written before or even after formation until documents say otherwise.

## Related ideas

Proprietary inventions agreement, work-for-hire, [/glossary/asset-deal](/glossary/asset-deal) IP schedules, and open-source policy.

## FAQ

### What is assignment of IP in simple terms?

Assigning IP means legally transferring ownership of inventions, code, designs, or brands to the company. Founders and contractors sign documents so the startup — not individuals — owns what it sells.

### Why does assignment of IP matter?

Investors and acquirers will not fund a company that lacks clear IP title. Missing contractor assignments are the most common fix-before-close item in seed diligence.


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Source: https://venturecapitaltracker.com/glossary/assignment-of-ip