An invention investor is usually a successful professional or entrepreneur.
Investors can be found through a lawyer, insurance agent, accountant, a family connection or an investor network.
It is a mistake to approach an investor without a plan and/or a track record. You need something to convince others of the potential for your innovation.
Here's what financier J. P. Morgan said when Alexander Graham Bell showed him his telephone invention, "Mr. Bell, after careful consideration of your telephone invention, we have come to the conclusion that it has no commercial possibilities."
A business plan is a detailed description of how you're going to make your invention successful, or details of how you are already making money with your invention. It also includes the terms of investment.
It is one of the tools we use.
Without it, an invention investor will have a hard time determining how they are going to profit from their involvement - as J.P. Morgan did after seeing a demonstration of the telephone.
A business plan is like a blueprint for building a house. The more detailed - the better. You can't appear like you don't know what you're doing when talking to a potential investor.
It doesn't inspire confidence even if you have a great invention.
Place yourself in the investors position. Let's say you have some money to invest? Where would you put your money? Real estate, oil stocks, commodities, business expansion?
You are not the only person looking for an investor's money. An investor has a lot of options and choices on where they're going to put their money.
You have to anticipate and prepare for their questions.
It's easy for anyone to find out that ninety-three percent of inventions fail to make a profit, which is enough to concern any investor.
But investors also know that successful inventions, or inventors, can make fortunes if all the right pieces are brought together.
Do It Yourself
You should not have someone else do your business plan. You can have some help but you should do the work yourself. The process will focus your attention on details you may not have considered, which can only help you.
It also allows you to thoroughly understand all aspects of your planning so you can confidently provide answers to questions about your plans.
Investors put their money where they are confident about getting a profitable return on their money. They are going to put their money where they are confident in the people and products potential for success.
Let's say you had blueprints for a house and someone asked you a question about the heating ducts. It wouldn't inspire confidence if you didn't know what a heating duct was.
Confidence is the major objective of your plan. It is really a compilation of answers to questions. The more answers you have, the more confidence people have in doing business with you.
An investor will often have knowledge, expertise and connections they would like to use. If you have a good plan and a product with excellent potential, an invention investor will often apply their resources to the success of your invention.
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