Building deep-tech advantage in CEE: From IP strategy to global expansion (Part I)

based on interview with Dr. Dipanjan "DJ" Nag, Venture Partner at Radix Ventures, the President of Innovaito, LLC, a Professor of Practice at Rutgers University, and a globally recognized expert in intellectual property strategy

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Deep-tech founders in Central and Eastern Europe are operating in a moment of structural change. Technology transfer models are evolving, geopolitical dynamics are shifting, and capital allocation patterns are redefining where and how companies scale.

For CEE founders, this creates both pressure and opportunity. The key differentiator will be how strategically you approach IP, ecosystem leverage, and global expansion.

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1. The new deep-tech playbook for CEE founders

Technology transfer is moving away from a purely patent-centric, transactional model toward an ecosystem-driven, product-market-fit approach. The most successful companies now build strategic IP portfolios early while simultaneously developing commercialization pathways through industry relationships.

Three lessons are particularly relevant for CEE deep-tech founders:

• Develop an IP strategy before you need funding. Data shows startups with approved patents are 59% more likely to raise VC funding.

• Adopt hybrid protection strategies. Combine patents for core innovations with trade secrets for proprietary processes.

• Leverage CEE’s structural advantage. The region produces approximately 10% of ICT graduates annually while operating costs remain 40–60% lower than Western Europe.

At the same time, US protectionism - including a 15% tariff on EU exports and aggressive technology restrictions - paradoxically creates new opportunities for EU-based deep-tech development. CEE’s combination of technical excellence, EU market access, and lower burn rates positions the region well for this shift. As access to the US market becomes more complex and costly, European deep-tech companies have stronger incentives to scale within Europe for longer.

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2. Scaling in CEE: Winning despite the growth capital gap

While 70% of funds in CEE focus on pre-seed and seed, Series B+ capital remains scarce. The region raised only €510 million across 148 deals in Q3 2025, with heavy reliance on large late-stage rounds. This creates vulnerability in the innovation pipeline - and forces founders to think strategically about capital efficiency and runway extension.

Choose investors for operational leverage, not just capital. Research shows startups receiving operational mentorship from VCs achieve 35% better growth and are 2.5× more likely to hit milestones. For deep-tech founders, this operational support should include:

(a) IP commercialization expertise: helping founders structure patent portfolios for maximum licensing potential;

(b) regulatory navigation support: particularly critical as EU AI Act implementation unfolds;

(c) talent network access: connecting portfolio companies with the 105,000+ engineers across Bulgaria alone, and the broader Balkan talent pool in Serbia (120,000 IT professionals), Bosnia-Herzegovina (21,000), and North Macedonia;

Structure cross-border advantage intentionally. Designing cross-border operating models - such as pairing Balkan engineering teams with market-facing operations in Poland, Czechia, or Romania - can strengthen competitiveness and improve access to customers and regulators.

Use strategic partnerships and blended finance to extend runway. Strategic partnerships with established EU industrial players can accelerate commercialization. In parallel, blended financing structures that combine EU grants and other non-dilutive capital (e.g., EIC, Horizon Europe) with VC funding can meaningfully extend runway in a capital-constrained growth environment.

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3. How to turn IP into a source of long-term value and growth

The fundamental mindset shift required is to view IP as a strategic asset that creates options, not merely as defensive protection. Patent-seeking startups command 93.2% higher valuations at the angel stage and 51.2% higher at the late stage, and they drive 78.6% of VC exit value despite representing only 24.1% of exits.

Three critical mindset shifts:

From protection to monetization. IP creates multiple revenue pathways:

(a) licensing streams: generating non-dilutive revenue while maintaining ownership;

(b) partnership leverage: using patent portfolios to negotiate better terms with corporate collaborators;

(c) collateral for debt financing: over 400,000 patents were pledged as security from 2016-2019, enabling startups to access capital without equity dilution. For CEE startups where growth capital is scarce, this non-dilutive approach is transformative.

From cost center to revenue center. The shift parallels IT's evolution from expense to revenue center, organizations treating IP as investment generating competitive advantage. This requires measuring IP success in business terms: contribution to ARR, licensing revenue, partnership deals closed, and acquisition premium attributable to IP portfolio. EU is especially well poised with the recent unified patent court (UPC) coming into effect and creating efficiencies in ensuring the IP rights are upheld.

From reactive to proactive. The biggest startup mistake is developing plans for business, marketing, recruitment, while ignoring IP strategy until crises emerge. We have seen this play out time and again with mega companies like Facebook and Google in their early stages.

Early IP strategy adds value:

(a) shapes technology development toward patentable innovations;

(b) establishes priority dates before competitors do;

(c) attracts investors by demonstrating monopoly in a specific technical area. For deep-tech companies with long development cycles, this early positioning is absolutely existential.

Practical implementation: Appoint a Chief IP Officer or dedicated strategic advisor from day one. This does not need to be a full-time role, but clear ownership of IP strategy is critical within the organization. In early-stage deep-tech companies, the Chief Technical Officer or Chief Innovation Officer can serve as the de facto CIPO, ensuring that IP development aligns with product, commercialization, and fundraising strategy.

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4. The most common early IP mistakes and how to avoid them

Five critical early-stage mistakes:

1) Premature public disclosure without patent protection. Many founders present at conferences or publish research before filing, permanently forfeiting international patent rights. While the US offers a 12-month grace period for disclosures, most jurisdictions do not and have an absolute bar.

2) Inadequate documentation and assignment agreements. Startups often develop technology with contractors or students without proper IP assignment, creating ownership disputes that impact funding rounds. University spinouts particularly struggle with unclear licensing terms from parent institutions. Case in point is the whole issue with the Stanford v. Roche case.

3) Filing too narrowly or too broadly. Either approach wastes resources, narrow claims are easily designed around; overly broad claims fail examination or create unenforceable portfolios. The critical part about patenting is to cover the actual product features through specific, narrower claims and build a moat around the invention through broader but valid claims. In this regard, using an AI-based search engine specifically designed for patent clearance or FTO search is critical.

4) Ignoring freedom-to-operate analysis. Companies invest in development without checking third-party patents, discovering infringement risks only during due diligence for funding. This can be devastating for financing deals. Perform the FTO search early and even focus on white space analysis to ensure broad coverage in the space.

5) Treating IP as purely legal rather than a business function. Delegating IP decisions entirely to patent counsel without business strategy input results in portfolios misaligned with commercial objectives. The future of the product launch is critically tied to the patenting. Legal analysis, while necessary, does not necessarily align with the business functions. The CTO and the in CEO need in a startup needs to provide the business vision to the legal team for proper patent coverage.  

Core strategies to avoid these mistakes:

Implement "disclosure before filing" protocols. Create internal approval processes requiring patent counsel (in-house or external) review before any public presentation, publication, or product launch. For CEE startups with academic founders accustomed to open research/science, this cultural shift is essential.

Conduct IP investment aligned with business strategy. Rather than comprehensive (and expensive) filing at inception, try to use: (a) provisional filings for early-stage protection at minimal cost; (b) strategic PCT filings delaying expensive national phase decisions until product-market fit is validated; (c) portfolio pruning, maintaining only commercially relevant patents; (d) patent monetization, as a strategy like large companies, try to divest assets retaining a non-exclusive license.

Develop hybrid protection strategies. For AI/deep-tech, patent the architecture while protecting training data and proprietary algorithms as trade secrets. This layered approach makes replication nearly impossible, even with patent disclosure. Research shows AI companies increasingly favor trade secrets for algorithms, datasets, and model weights, elements often unsuitable for patents, and where secrecy can be maintained.

Leverage Balkan engineering talent for cost-effective IP development. With technical capabilities comparable to Western Europe at 40-60% lower cost, Balkan teams can conduct extensive prior art searches, develop robust technical documentation, and prototyping, all critical for strong patent applications but often unaffordable for resource-constrained startups. A combination of human and AI is the way to go, even for startups.

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>> To be continued next week. In Part II, we dive into smart IP strategy for AI startups, the opportunities and risks shaping CEE deep-tech over the next decade, and how founders can position themselves to win in the US market.