Click to Print

How can I start propositioning capitol investors if I'm not sure how much money I need yet?

I have invented a product in the automotive field that I absolutely know will be a huge success. I have obtained legal advise from a patent professional and his best advice is to find someone who has the capitol to start a business. But I find it very difficult to even come up with a business plan when I have no idea what my product will cost (each). Also patent protection is not cheap. My question I guess would be, how hard will it be to get some capitol investors to hear me out?
Tim Berry answered January 18, 2008
URL: http://www.entrepreneur.com/answer/221267
Sorry, but nobody serious will take you seriously when 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 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.

And don't overestimate patent protection. Not only is it not cheap, but also it won't protect you that well, either. Our patent system is broken.

You need to do some estimated numbers. Costs are essential, sales price too, and in truth, the likelihood of being able to just sell your patent rights is low.

I agree with your patent professional. You need to ally with somebody who has useful experience in this area, and who 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 them for help.

Sorry, I'd like to be more positive, but I think this is the truth.
Tim Berry is the chairman of Eugene, Ore.-Palo Alto Software, which produces business-planning software,
He founded Bplans.com and wrote The Plan-As-You-Go Business Plan, published by Entrepreneur Press. Berry is also a co-founder of HavePresence.com, a leader in a local angel-investment group and a judge of international business-plan competitions.