At last, you have that brilliant idea for an invention. Only one problem: you don’t have the funding to turn your invention into a reality. Before you throw your idea away, consider invention funding.
There are many different ways you can get your invention financed, from loans to investors. Keep reading as we break down everything you need to know about invention funding.
Protecting Your Idea For Invention Funding
Working with investors is the best way to finance the creation or launch of your invention. You can seek out financing with only an idea, meaning you haven’t begun the process of making your invention.
Developing your invention past the idea means that you have filed a patent application, are engineering the product, developing a prototype and creating a proof on concept.
Make Sure Your Idea Is Orginal
Before you start protecting your idea and hounding investors for money, you’ll want to make sure your idea is original. To do this, you can do a patent search with either an attorney or on the U.S. Patent and Trademark Office’s website.
Here, you can find out if your invention is as original as you think it is. This step is key in applying for grants, as you can’t get funding for an idea that isn’t original.
Protect Your Idea
Keep in mind, that while investors are the best way to finance your idea so you can create and launch it, you as the inventor should still make sure that you protect your idea from any theft.
If you don’t take the proper steps of protecting your idea and are already meeting with investors, then you risk that an investor could listen to your pitch, steal it, and go ahead and create your invention on their own, leaving you with nothing.
This is why, at the least, you’ll want to make investors sign a non-disclosure agreement before you meet. You could also wait to pitch your idea until after you have achieved patent-pending status. Waiting until you have a patent is typically the safest way to protect the rights to your idea.
However, patents are expensive. The cost of filing a patent can be as much as $20,000. Chances are if you’re already having a hard time getting the funding for your invention, you probably don’t have the finances to cover you patent costs.
Types Of Funding
When it comes to funding your idea, there are different routes you can take. Here are some ways you can go about getting funding and/or an investor.
Research Nonprofit Grants
If you happen to work with a nonprofit organization, they might have grants available if your invention is a social enterprise. A social enterprise will have both a social and for-profit side to it.
If this describes your idea, then a nonprofit organization would be able to be a fiscal sponsor. This would allow you to search for grants under the nonprofit’s tax-exempt status.
You can find out about nonprofit grant opportunities by joining a local inventor’s club. Here you can network with other local inventors and learn about these opportunities. Check The United Inventors Association’s website for a listing of local inventors clubs.
Look For Student Invention Grants
If you are a college facility member or a college student, then you might be able to apply for a Student Invention Grant from the National Collegiate Inventors and Innovators Alliance. This organization gives awards to inventors with ideas that can demonstrate either technological innovation or a positive social impact.
Apply For Federal Funding
The U.S. government actively supports the development and research work for inventors with projects that align with the objectives of the U.S. government’s departments. If this describes your invention, you can receive funds of up to several million dollars that don’t need to be repaid.
You can learn about the government’s grant opportunities on their website. Here you will be able to efficiently navigate between all of the government’s granting offices for opportunities.
Submit A Financial Request To SBIR
You can also submit a financial request to the Small Business Innovation Research office. This works well for inventors with a small for-profit business that is at least 51 percent owned by a permanent resident or U.S. citizen. The business also needs to have under 500 employees.
This office has 12 federal agencies and offers maximum funding values from $150,000 to $1 million.
Present To Angel Investors
Another option is to present your concept to “angel” investors for funding. Angel investors tend to sponsor innovations by donating somewhere between $20,000 to $100,000. These investors expect to be paid back in the form of a small percentage of ownership in your newly formed company.
Angel investors will rarely get tangled up in the day-to-day management of your idea, but they will offer you introductions to experts in their network that can be resources for you. To find an angel investor, contact your local chamber of commerce or college’s alumni association.
Talk to Venture Capitalists
Another funding option is to talk to Venture Capital (VC) firms. These companies will sponsor your idea at the highest level of usually millions of dollars. In return, they will ask for a significant amount of ownership in your start-up.
VC firms tend to be involved with the strategic direction of your start-up company and are on the board of directors of your new business.
Talk to Family and Friends
Another option is to talk to your family and friends and see if they are interested in investing in your idea or giving you a loan or donation. You should consider what would happen to your relationship with your family and friends if you were not able to pay them back.
This is why you should also consider websites like Kickstarter that let you get funding for an idea from your network of friends and family. Here, you would pay them back with non-monetary items which might be more attainable for you.
Get A Loan
You can also look into getting a loan, but you will need to pay that back over time. There are many loan opportunities out there, including taking out more than one payday loans.
Get Funding For Your Invention
Now that you know your options for invention funding, it’s time to get your brilliant idea funded. Make sure your idea is original and protected first, then explore these investor and loan options.
For more resources for inventors, check out the rest of our blog.