Trademarks and venture capital valuation

•We examine the role of trademarks in start-up valuation by VCs.•The presence and number of trademarks is positively related to valuation.•There is an inverted U-shaped relationship between trademark breadth and valuation.•The value of trademarks depends on the start-up's progress in the venture cycle.

This study investigates the role of trademarks in the start-up valuations of venture capitalists (VCs). Our results show that the number and breadth of trademark applications have inverted U-shaped relationships with the financial valuations of start-ups by VCs. The findings also indicate that in later funding rounds, the value of trademark applications decreases when the start-up progresses into more advanced development stages. Start-ups should consider these findings when seeking funding from VCs and should stress their market and growth orientations and their willingness to protect their marketing investments by highlighting their trademark activities.