What other ways are there to capitalize on your ideas rather than a startup?
I was wondering if there were any other ways to capitalize on your ideas without having to start a company. Suppose I am able to design a basic prototype already - how should I proceed? How have inventors been able to sustain themselves with their creation without starting a company?
You can license your idea to a company already doing business.
Find a company that would best utilize your idea, develop a relationship so that you can set up a licensing arrangement with them. This practice has worked with many companies who have relied on ideas from other entrepreneurs and inventors who do not want to deal with the cost of starting a company.
As others have mentioned, rather than starting up a company, you can license the idea to another entity. You'll need a patent or at least a patent pending. You could target either established businesses or a startup/entrepreneur depending on your idea and the market(s) for your idea.
For liability reasons, you may wish to still start up a company though (an LLC for instance) to assign any patents and, subsequently, any license agreements. Essentially, this would just be a holding company for your idea(s).
Having an advisory board will help. First you need subject matter expertise. No matter how revolutionary your idea, some other company has been working in that field for years. Use social media tools such as LinkedIn and Twitter to find the best and brightest leaders in your industry. If your idea is as great as you believe, they will be eager to get involved.
You can develop a quality plan for your idea and then use that to pitch it to VC's who are willing to buy your ideas. This presents a win/win situation for both you and the VC.
Some ideas require lots of selling. Develop your elevator pitch, especially focusing on identifying the customer and the benefits they will receive. You will have to help your potential partners know how to sell it.
As long as you have done your market research and know that your idea "prototype" supports a need or improvement of an established market / company. Then patent what you have and sell it out right then you do not have to mess with starting an company. But that is a one and done, also note that by doing this way with out establishing even a simple LLC you will not have the tax benefits of your investment, expenses, etc and you will take on the full tax ramifications when you sell this prototype as the company you sell it will report it on their books, especially if your idea has a residual benefit for you. You also ask how to sustain yourself as an inventor which in reality is starting up a company as an inventor and you will want the protections of your ideas running through an LLC or some sort of legal entity.
Consider a University that ofrfers a degree program in the field related to your product. For instance, if you have a food product you are seeking to launch, seek out a Nutritional Science program. etc. etc. Contact the dean of the appropriate school within the Univ.
Schools are very keen to leverage their asets and commercialize appropriate products utilizing technology transfers.
Not sure if it has been mentioned yet - but Stephen Key has a great book on selling your ideas and patents to other companies.
Patent your ideas first, then you will have protection against companies taking your knowledge and leaving you with nothing at a later date.
Patent your idea and then showcase it first through the one source that everyone now a days is a part of...media! Broadcast it over facebook, twitter, instagram, YouTube and wherever else you can get your idea to. Word of mouth is one of the most powerful tools when promoting anything. :)
Try them out as a part time business at little cost.Do some seminars clinics for free.Test them on the social media tools.
Startups are actually not the best or even a most popular way of monetization of ideas... Licensing is. You need to develop and protect your idea up to a certain point (different for different markets and industries) and then can license it out or sell out right, or create a JV ... or else.
I guess the simplest answer is to join or be a part of or make an arrangement with an existing company. There are advantages and disadvantages to this of course. One can take advantage of existing structures that can support and promote the idea you have. The disadvantage is that there would likely be some sharing of the benefits of such ideas. in addition the ideas need to be exposed to others in a way that, potentially, can raise issues of ownership and royalties, trademarks etc.
One has to weigh up the advantages in relatinh to the disadvantages. Many inventors hitch top an existing company that produces similar products and come to an arrangement that satisfies all.
A lot has to depend on what you want out of the invention, the arrangement and how much you are prepared to compromise.
You need a to find a "partner" with means to bring your design to market.
There are plentyof angel investos / supporter out there.
Other suggestion is start an advisory board - folks that will give the time, provide introuctions, etc..,..
Non-disclosure agreements aren't worth the paper they are write on. But don't trust me--I'm a lawyer. Every time you approach someone you are giving him or her access to your ideas and likely the right to copy them. I would search high and low for venture capitalists, befriend them, find out how they work and see if they are predisposed to like your idea based upon what they invest in, if you can find that out. You might also look for partners via companies that already have something similar to your concept. Consider licensing your idea, after the proper protections are secured (copyright, trademark, patent).
Understand that what you think is a great idea may not be one, or it may already be in existence. If you have one idea, you'll likely have dozens of others. Strategize so that if one is taken, you still have the other ones up your sleeve. Do not think "storybook" I-want-to-be-a-creator. Even Facebook was a stolen idea, so be real about what's likely going to happen to your concept. If you understand that your ideas WILL be taken, you can be much more realistic in doing what you can to protect it from the claws of others who purport to want to help you.
Better yet, get LexisNexis and look at all the lawsuits that are filed against our brand name companies (Apple v. Samsung, for example and those companies are worth billions!). As soon as you get used to the idea that almost EVERYBODY steals, you'll thank me for your not being bludgeoned while you're out there hawking your new idea--because you'll think twice about giving it to just anybody.
Yes, you can find someone to implement your idea. Existing companies is one option. If you are not interested in presenting and looking for producers, you can share your idea with some type of business incubators. There are some of these which attempt to meet inventors with entrepreneurs and realize the idea. The difference is in the percentage of your profit.
Search inventor groups in your area..... but before you approach anyone with your idea, let alone a prototype, seek out legal counsel to protect your invention... so you can pitch it without jeopardizing your ownership of the idea, prototype or development of it.
Yes, you can license your product to manufacturers. Harvey Reese is an expert in this field. Check out his web site at www.money4ideas.com. One company I know that accepts pitches from inventors is Telebrands in NJ. They do many of the product infomercials on TV. However, your selling price point needs to be about $19.99 for them to consider it. That is why if you have a $10 product, they'll sell two together or add an accessory so the price ends up around $19.99.
The easiest way is to find a company in a related business and present them with your idea/prototype. I have helped inventors/entrepreneurs do this numerous times. Let me know if I can be helpful - send me a private message.