What patents are used as collateral?—An empirical analysis of patent reassignment data

•We use novel data on patent reassignments with a security interest.•With this data we explore what patents are used as collateral.•Underlying technology characteristics matter for patent collateralization.•Analyzed characteristics of the patent's exclusion right do not matter.

Only anecdotal evidence exists that ventures use patents as collateral to access debt financing. In this paper, we use a novel dataset on patent reassignments with a security interest to explore quantitatively what patents are used as collateral. We analyze characteristics of patents to disentangle whether it is the technology underlying a patent or the patent's exclusion right per se matters for collateralization. We do find empirical support only for technology-related characteristics, suggesting that lenders use patents to collateralize high-quality technology that can, in case of default, be redeployed to ventures in similar technology fields. On the other hand, patent-related characteristics like scope, which are, in general, related to patent value and are particularly important for non-practicing entities, do not matter.