Venture capital for a new idea or invention

Inventors, entrepreneurs and small business owners can find information and resources to help in the search for financing. There is much to be gained, and much to lose in the arena of new ideas and inventions.

Venture capital negotiating process

• Preparation
• Positioning
• Endurance

There are some excellent online resources available to help you with your search for a venture capital source. 

Preparation

What if you only have a good idea? The chances of finding a VC are minimal. It isn't enough to be excited about the next earth-shattering product or service.

Postioning

Make sure that the VC you are approaching has an interest in the area you are proposing. You wouldn't approach a VC specializing in plastics to invest in a post and beam construction firm. Do your homework by checking their website, asking questions, seeking referrals.

Endurance

You will almost certainly experience setbacks and obstacles in your quest for venture capital for a new idea or invention. Many VC's say that it is necessary to follow up the intial contact with phone calls, emails, snail mail, and even personal visits.

You must believe in your idea and be passionate about it. Otherwise, why would anyone be interested enough to risk their money as an investment?

What are some pitfalls?

• Keep your eyes wide open

• Beware of sharks who will steal your ideas. You may think everyone is trustworthy and honest, but experience certainly proves otherwise. There are many stories of inventors who had their ideas stolen. Be careful not to deal with questionable firms who make dramatic promises.

  A reputable company or individual will have the necessary paperwork in place to protect you and them.

   

• Don't be in a hurry

• A common trait of entrepreneurs is a lack of patience. This is not always a bad thing, but when it comes to financing, take your time, be circumspect. A mistake now can cost you dearly for a very long time.

   

• Communicate with you investor

• A lack of communication means only one thing to an investor: bad news. Perhaps things aren't going as well as planned; don't try to hide it, communicate. It will come out in the end anyway, it is much better to be upfront about it.