Finding Money To Get Started
August 23, 2010 - Doug in Birmingham asks, "How do I get money to patent and prototype my invention?"
This is a big question that every inventor faces unless he or she is independently wealthy. It goes to the heart of what's required to be successful. In the beginning stages it's easy to think big and find ways to spend huge piles of money. The trick is to find ways to advance your project inexpensively.
My view is that until you've created a prototyope you haven't invented a thing. The first step in getting money is to make a prototype on your own. Making a nice prototype often requires a range of skills in machining, sculpting and electronics. But ANY prototype, even a nasty prototype is far better than no prototype at all. A crude protoype can often be made with tape, glue, wire, foam core, clay and some bits and pieces from Tru-Value and Radio Shack. Drawings and computer animations can work too. My recommendation is that however you do it, you make a first stage prototype on your own, as cheaply as possible, without involving anyone else (this has significant implications at the patent stage). If you can't find a way to do this on your own, at a very basic level, then you should consider spending your time, money and energy in other pursuits.
Once you have a first stage prototype you have something to show to people. You need to be careful about exposing the prototype, especially if you haven't filed for a patent. I suggest you stick to family and friends you can trust, swearing them to secrecy before showing them what you've got (in a private place rather than a restaurant or town square). If you're really paranoid and your family won't disown you for doing it, you could even ask them to sign Non-Disclosure Agreements (NDAs). I don't do that but know of people who do.
You will need money to make a better prototype and to file for a provisional patent. With your crude prototype in hand you should visit with prototyping sources (industrial designers, machine shops, etc.), and attorneys to find out how much it will cost to take the next steps and what options you have. This will give you a budget for the next two steps:
1. Creating a 2nd stage prototype
2. Filing a provisional patent
Keep in mind that for both steps, the more you do yourself the less it will cost. Decide what you can do and what you need to pay for and then come up with a budget. Know that every penny you raise now will cost you a substantially bigger share of your invention than a penny raised at a later stage. Think cheap.
Now you can go to your family and friends and see if they really think your invention is as great as they said it was when you first told them about it. Show them the prototype and tell them about the glorious future. You can and should also ask the people who quoted on your 2nd stage prototype if they want to be a partner and provide all or some of the services on a % of "profit" basis. Designers and machinists sometimes say yes. I've never heard of an attorney who said yes at this stage. How you put your partnership together is beyond the scope of this discussion. All I can say is that you should give away as little as possible while being fair to your partners.
A 2nd stage prototype and a provisional patent are enough for seeking licensing deals. Getting those two elements in place may cost between $2,000 and $200,000 - far less than gearing up for manufacturing. Unless you plan to make and sell your invention yourself you do not need money for manufacturing tooling, packaging, advertising, office space, warehouse etc. etc.
Do you have a question? Ask Mike. Please keep in mind that this is a public forum.
For more than two decades Mike Marks has been active in creating and marketing new products and forming new businesses. As founder of Invention City and co-founder/partner of WorkTools, Inc., Endeavor Products Company, and Accentra Inc., he has managed the design, manufacturing, marketing, patenting and licensing of products such as the Gator-Grip® Universal Socket the Black & Decker PowerShot® staple gun, the Staples One Touch stapler. Over the past ten years products developed by WorkTools have generated over $350 million in retail sales and over $8 million in royalties. Mike has negotiated a wide range of contracts, established manufacturing operations in Taiwan and China, managed national and international sales, run public relations/advertising campaigns and written and produced television commercials and video news releases. Prior to founding WorkTools in 1986, Mike worked as a commercial photographer and photojournalist in New York for clients such as American Express, Nikon and Newsweek Magazine. Mike graduated from UCLA in 1978 with a degree in Economics.