TradeNews: What do Hollywood, the Silicon Valley and the Czech economy have in common?

In the first edition of TradeNews in 2024, our US expert Milo Poplar shared his views on the similarities between California and the Czech Republic. Here’s a quick preview for those who don’t own a printed version.

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The key link is an emphasis on intellectual property (IP) as a crucial asset. As the Czech Republic evolves into a knowledge-based economy, its focus on innovation and intellectual assets intensifies. However, Czech businesses can gain more value from their IP by expanding into California. IP assets in the US significantly influence business growth, accounting for over 90% of S&P 500 companies' worth, compared to over 20 % in the Czech Republic.

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Key Californian industries, such as Los Angeles' entertainment sector and San Francisco's tech industry, are prime examples of sectors where IP is crucial to business success. It’s important to note that IP extends beyond tech and creative sectors, and encompasses all industries, including manufacturing or agriculture. Additionally, the IP laws in California are more business-friendly than those in the Czech Republic, allowing for business ownership of copyright and offering broader protections and incentives for innovation across various sectors. Legal environment is particularly advantageous for businesses seeking to safeguard their intellectual assets and capitalize on their innovations.

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While Czech companies might choose to focus their funds on their current business, the increase of the valuation of their IP may be funded externally. The venture capital (VC) landscape in California is rich with opportunities, receiving 51 % of all VC funding in the US in first three quarters of 2023. California's VC funding alone quadruples the entire EU's (2022: $104bn vs. approx. $26bn). Average deal size is also bigger in the United States vs. the EU (2022: $6.8m vs. $1.2m for seed stage).

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Access to these funds can be transformative for Czech companies, as evidenced by successful Czech startups like ProductBoard, GoodData and Around. In California, capital is not only more abundant but also generally more accessible, with lower legal costs and less complexity in initial funding rounds due to the use of standardized documentation.

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We encourage Czech companies to leverage California’s vast market, with its $3 trillion GDP equaling the world’s fifth-largest economy. The affordability and ease of establishing a presence in California position it as an ideal destination for companies aiming to enhance their market presence, increase valuation and explore new financing avenues.

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California's VC funding is a game-changer, offering a vast market and simpler funding rounds. Ready to expand? Reach out to us to get your legal support from our bilingual team with dual Czech and US qualifications. Send us a message here.