Thread: New Business Help Needed!

First off I’d like to say hello to all, as this is my first post in the business section!

Basically I have an idea for a product that I believe (as do others that I’ve talked to) has the possibility of being highly successful. Currently I’m personally saving up to have the product patented and a prototype built. However, at my rate of current savings I will not be able to get the ball rolling for at least a year.

Say that I go the route of getting outside investor money, what would the proper payback be as percentage of ownership? Being that the patent could be worth tens of millions to nothing so I have no clue what to value the investor return. Also I would be willing to give a larger percentage of ownership to someone that has a high level experience with electronics, connections with certain large corporations, experience with patents. Overall my goal would be to patent and build the idea that I have and HOPEFULLY sell the rights to the patent to large corporations.

If anyone has any experience with patents, inventions and start-ups in the electronic field any input would be greatly appreciated.

Thank You Much!

search, this was covered about 48 times last month

Did you invent a snuggie that you can put furniture inside? Your rocking chair will never be cold again!

(Use the search button)

I guess I was not clear with my specific questions and yes, I did use the search function and mainly only come up with people going thru the patent process or just simply finding investors. Which is not directly what i'm asking.

1) With something like a patent that is hard to value, how would you come to a percent of ownership given to the investor in return for funding? Being that generally you can decide the payback based on future earnings it is proving difficult with something that has such a large window of value as a patent.

2) What would you value the added intellectual property (knowledge,experience,connections,ext.) that an investor would bring to the table along with funding compared to another investor that is only funding the project.

3) I would like to hear about some personal experiences with people dealing with selling patents or products to large corporations.


Thanks for taking the time out of your days to add nothing to this thread.

Originally Posted by MidWest

I guess I was not clear with my specific questions and yes, I did use the search function and mainly only come up with people going thru the patent process or just simply finding investors. Which is not directly what i'm asking.

1) With something like a patent that is hard to value, how would you come to a percent of ownership given to the investor in return for funding? Being that generally you can decide the payback based on future earnings it is proving difficult with something that has such a large window of value as a patent.

This is where the term "Sweat Equity" comes into play if they are actually creating the work. If not, you usually negotiate a pre-determined percentile of ownership or price that the work is worth and then put it in writing. There is no real way of judging future worth so you need to be extremely careful not to give away too much. If you really think the idea is going to be the next snuggie then try to pay it off yourself through loans. It all comes down to negotiation.

2) What would you value the added intellectual property (knowledge,experience,connections,ext.) that an investor would bring to the table along with funding compared to another investor that is only funding the project.

The knowledge really means nothing unless the investor is proactive. I've seen some terrible angel investors that drop off money and sign a contract without helping the business intellectually at all (they are usually busy people). If the person can add knowledge, experience and connections, the only way you can really judge a price value of their assistance is by finding how much it would cost to replicate their value with outside sources.


3) I would like to hear about some personal experiences with people dealing with selling patents or products to large corporations.
Usually the corporations will try to find ways around your patent before making you an offer, if not they will call you in for negotiations and that is where you can decide a cash value of the patent.

Thanks for taking the time out of your days to add nothing to this thread.
Go **** yourself

Hope that helps.

LOL @ Adrenaline's last answer. Midwest, to share some of my historical experience, I've commonly seen potential investors come to the table with a percentage of ownership that they'd like to have in exchange for funding. This will create a foundation upon which you can negotiate. It'll all come down to clearly defining your goals and outlining what you hope to achieve. Take some time to outline what you value. Is it money only? Do you need an investor that will bring knowledge to the table? Don't just choose an investor that'll give you money. Choose one that aligns with your overall goal. Do you want to build a business, or does licensing/selling the patent to an established company appeal to you? Just a few more things to consider.

Originally Posted by MidWest

I guess I was not clear with my specific questions and yes, I did use the search function and mainly only come up with people going thru the patent process or just simply finding investors. Which is not directly what i'm asking.

1) With something like a patent that is hard to value, how would you come to a percent of ownership given to the investor in return for funding? Being that generally you can decide the payback based on future earnings it is proving difficult with something that has such a large window of value as a patent.

2) What would you value the added intellectual property (knowledge,experience,connections,ext.) that an investor would bring to the table along with funding compared to another investor that is only funding the project.

3) I would like to hear about some personal experiences with people dealing with selling patents or products to large corporations.


Thanks for taking the time out of your days to add nothing to this thread.

yeaaaaaa thats the way to get help!

If you would like to send me a business plan first, I would be willing to schedule a call with you to answer some of your questions.
There are no right/wrong, black/white answers to your questions.

Up to you.