For Inventors: Sources of Capital

This article initially appeared on the website November 2, 2013

inventorSome inventors turn to 3rd-parties for help, seeking to avoid the ego-mashing, time, and effort that seem to accompany every capital-seeking attempt. More often than not, however, they find the relationship expensive and unsuccessful. Successful efforts invariably require the inventor’s involvement as well as access to individuals who can “pull the trigger” on investment – who you know can be just as important as the product’s viability. Professional advisors may ease the process and improve your chance of success if they possess the following:

  • personal contacts among the sources whom you seek to solicit
  • an understanding of the intricacies of negotiation
  • prior successful experience raising capital or licensing inventions
  • your best interests

Whether paid by fee up-front or contingent, or as a percentage of your final arrangement, any advisor should represent you, not the potential investor.

As the girl in the fairy tale ruefully remarked, “You have to kiss a lot of toads to find a prince!” Raising capital is not much different and is often a difficult, tedious, and frustrating process.

Common sources of capital worth pursuing include the following:

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For Inventors: How to Monetize Inventions (Financial Arrangements)

This article first appeared on on November 9, 2013.

inventorAs any viewer of “Shark Tank” can attest, the variety of financial arrangements which are negotiated between inventor entrepreneurs and investors is broad. A final agreement is always the result of negotiation between the two parties. Unfortunately, many inventors go into the gunfight with a knife, so to speak, over-matched and under-prepared.

Unless you are a veteran of previous negotiation and thoroughly understand the potential value of your invention, you would be wise to engage the services of an attorney and/or a firm who has previously negotiated financial transactions for similar inventions. You don’t want to leave money on the table, nor do you want to have an unrealistic view of your work. Expert assistance can help you avoid either outcome.

The following descriptions are by no means exhaustive, but represent a sample of the strategies you might employ in order to monetize your work:

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