You have an idea, and you think its going to be the next big thing. If only you could find someone with the manufacturing and marketing expertise to get your invention in front of customers. Ideally, you’d like to get your invention on the shelves at Walmart or Home Depot, so you can makes tons of money for doing nothing and retire to the Caribbean.
Of course, you file a patent application so that no one else can take your idea. Then you sit there and wait for an investor or mega-retailer to approach you. Unfortunately, this tact rarely works.
Let’s say you find an investor and ask if the investor would like to license your invention. You supply the idea, and the investor does all the rest. Of course you only take a small cut of the profits. What are the first questions the investor is going to ask?
Conversation with a potential investor. Have you protected your idea? Answer: no, I was hoping you would pay for a patent application. Have you made the product? Answer: no. How do you know that your idea will even work if you haven’t made the product? Answer: it should work. Is there a market for your product? Answer: I think so, because everyone I tell about my idea says they like it. Just because your family and friends say they like your idea, does not mean there is a market for the product.
Bottom line, if you’re unwilling to invest any time or money, or take any risk with your idea, why should an investor be willing to do so?
Another conversation with a potential investor. I did a patent search for my invention. There doesn’t appear to be anything like it in the market. I applied for a provisional patent application, so I have patent pending status and its going to be hard for anyone else to compete once I finish the patent process and have an issued patent. I built several prototypes of my invention, based on feedback from focus groups. I took the best prototype and made a product, which sold out on my website in less than a week. Conservative estimates based on these actual sales indicate that an investment of X dollars should result in a return of Y% within the first year. Investor: this sounds like a great opportunity. Let’s talk about an investment or licensing deal.
All too often, inventors come up with great ideas and fail to pursue their ideas through to fruition. Not because the invention itself is a bad idea. But because they just don’t want to put the time and effort, or risk any money to take their invention out into the marketplace. Remember the old adage – nothing risked is nothing gained.