Your invention solves a problem. A bike rider on the road can change a flat tire more easily with your invention. Once you determine the problem you invention solves, you can start to find a market of people who will buy your invention. Assume that your research reveals a market for your invention. You can now come up with a price for the product and an initial level of sales. If the projected sales are large enough, you may be able to find investors for your invention.
Perform some market research. Read information about the bike industry and talk to people who work in the field. Find out the types of people who ride bikes and do their own minor repairs (like changing a flat tire while on the road). Say, for example, that you ideal customer is a man or woman between the ages of 25 and 50 years old. The customer goes on long weekend bike rides, normally with a group of riders. Your client has an upper level or high level of income. Once you identify your ideal customer, you can think about how you can market to them. If most of your clients are working professionals who are tech savvy, the best way to reach them may be though your website and social media posts.
Say that your research finds that 10 million people in the US are frequent bike riders. Of that 10 million, 3 million are serious enough to make their own minor repairs, including flat tire changes while on the road. The 3 million serious bike riders experience 5 flat tires on the road each year. Those bike riders are changing 15 million flat tires a year. You estimate that your tire could attract 20% of the flat tire business for the serious bike riders. That’s (15,000,000 flat tires multiplied by 20% = 3,000,000 tire sales). You plan on selling the tires for $6. If you sold 3,000,000 tires you would generate $18 million in sales. This is the type of analysis in investor would want to see.
A patent is an exclusive right granted for an invention. The invention may be an idea or a process that solves a specific problem. The bike tire solves a problem for bike riders, for example. If you create literary or artistic work, you may be interested in a copyright. A copyright gives the creator rights over their books, music, artwork or films. You can think of a trademark as a sign. The sign distinguishes your product from other products in the marketplace. McDonald’s golden arches logo is considered a trademark. You can find our how to file a trademark using this link: Get a Trademark.
Determine if your invention is patentable. You cannot get a patent for an invention that has already been publicly disclosed by someone else. The USPTO has a database you can search for any public disclosures. A patent can come in several forms. A utility patent is a process, machine, or an improvement on an existing process or machine. The vast majority of patents are utility patents. There are also design patents. These are the two forms of patents that most often apply to business. Applying for a patent is expensive. To save time and to increase your chances for success, consider hiring an attorney. You can find an attorney who is licensed to practice before the USPTO. You will go through a similar process for a copyright for literary or artistic work.
Your trademark identifies the source of the product or service. When you see a golden arch on a building, for example, you know that the building is a McDonald’s restaurant location. Another goal of your trademark is to distinguish your product from the products and services sold by other companies. When you register your trademark through the USPTO, you are notifying the public that you claim ownership of the trademark. This step is important, because registration creates the legal presumption of ownership. You’re putting people on notice that you own and intend to use the trademark.
If you can’t create a working version of your invention, try to generate 3-D drawings of your idea. You can also provide a diagram of how your product works. You may be able to find invention clubs, or other groups that are specifically interested in inventions. Your prototype or 3-D drawing will be particularly important to this group. Your goal should be to provide anything that will help the investor visualize exactly what your invention will do. As an inventor, you want them to understand your invention’s features and benefits.
An investor will be interested in an idea that is registered as intellectual property. Assume that you apply for a patent on the bike tire idea. Your patent will prevent others from using your idea. Since you have a monopoly on the idea for a period of time, you can profit from the invention. Your business plan needs to clearly explain how you will use the investor’s funds. You can only do this if you’re thought carefully about your business. Many inventors need funds to produce their product early in the business. When you start selling the bike tire you produce, for example, you can start to repay the investors. The business plan should include the market research you’ve performed. You plan should state the problem you are solving and how your product addresses the problem.
Ask peers in your industry. Check with suppliers, former competitors and former co-workers. These people know you and your reputation. If your business idea solved a problem in their particular industry, they may pick up on your idea quickly. These people can refer you to investors they may know. Check on potential investors with your commercial banker. Your banker is another contact that knows you well. The banker may have banking relationships with potential investors. Run the idea by your financial advisor. Many successful financial advisors work with wealthy people. They may have clients that invest in business ideas similar to your plan. Since your advisor already does business with you, they may refer you to a wealthy client who invests.
You may present to angel investors, who help companies in their very early stages. Venture capital firms fund companies that are farther along in their development. You may also present to invention clubs or private investment groups. Show that you are invested emotionally in your invention. Many inventors create their idea to solve a problem that is very important to them. If you’re the bike tire inventor, you may see your bike tire as a way to improve bike-riding safety. If that passion comes across emotionally, you’ll be able to make a connection with an investor right away. Your investor wants to earn a return on their investment. Make sure that your presentation clearly states how they will earn a return, and the time period required.
