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Real Truth About Selling Your Invention
Q: How can I approach investors for my invention? My patent professional says I should look for capital. I have no idea what it would cost to manufacture, and patents aren’t cheap. How can I write a business plan when I have no information?
A: Before I give you the formal answer posted on the Web, let’s take a minute to contemplate reality. The chance that your idea is really worth something is very, very small. You have so much going against you. Selling an idea is something like selling a book, a movie or a painting before the book is written, the movie filmed or the painting painted. The value ahead of time is very low. It’s after you realize the idea, by turning it into a business, that gives it real value.
Furthermore–and here’s where the patent comes in–you’re on the right track there. But still, you don’t really own that idea. The government protects creative works with copyright and inventions with patents, but those are rare. Most patents are worthless.
Sorry, but nobody will take you seriously if you say, “I have no idea what my product will cost.” If you don’t know, who does? You are expected to come up with a good estimate. It doesn’t have to be exactly correct; everybody understands that it’s just an estimate and that you’ll eventually get detailed costs from a manufacturer (or somebody will).
So your next step is to get an idea of what your product will cost. Find a way to make a reasonable estimate. Call somebody who might know more than you do and, if that first person doesn’t know, ask him or her to suggest somebody else who might.
I agree with your patent professional. You need to ally with somebody who has useful experience in this area and whom you can trust. You can’t get this to the point where you can talk to arms-length investors without having a stronger team. You can’t take the next steps without having a much better idea of what goes on, or a trusted ally. You also need some good professional advice.
If (and only if) you really have something that is a real business opportunity, then you’re in very dangerous waters, full of sharks. Get an attorney you can trust. If you know somebody you can trust with more business experience in your field–and I mean real experience–ask him or her for help.
Photo by Ed Towles.
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Paul Douglas on February 1st, 2008 3:49 pm
What market or niche does your invention serve? Is there someone already serving that market? Is there a demand for it? Have you done your market research?
One thing all inventors of better mouse traps seem to believe is that they need to do it all. Think it, develop it, prototype it, patent it, build it and sell it. That robs you of the time you can use toward your unique ability. Creating more inventions.
If there is a strong enough need in the market for your invention, you may want to consider licensing the product to a manufacturer in the market your invention serves. They already have the infrastructure in place to manufacture the product. There sales and distribution channels are established. They already have the credibility and trust in that market meaning they will have less sales resistance than you will have.
By licensing your product, you make one sale. You will have no overhead. You will assume little risk. And if the product you invented is a success a healthy royalty check.
You would need a working prototype. And the willingness to obtain a booth in trade shows to get exposure. Of course building a name for yourself in this community to help you build some buzz would help as well.
Hope this helps.
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