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.