That’s the number of US patents that were filed in 2015 in the US alone.
Clearly, masses of new ideas for inventions are being had all the time! However, you can guarantee that only a small proportion of them will ever be brought to fruition.
Different reasons. But the main one is almost always this: money.
Getting the money to make an idea a reality is rarely an easy endeavor. You have to persuade someone of the viability and potential success of your would-be new product. As we all know, people tend not to separate with their money all that easily.
Raising the funds can be easier said than done.
Have you just had an epic idea for an invention? Thankfully, there are different options at your disposal. Interested in learning more?
Keep reading to discover how to raise funding for your new invention.
1. Leverage Your Close Relationships
The bank of mum and dad may have long held the key to your problems.
Why not turn to it again to make your invention come true?!
In all seriousness, many inventors and entrepreneurs turn to investments from family and friends. This is for numerous reasons. Firstly, you can get the money quicker. Secondly, (unless they’re particularly business savvy), these loans are unlikely to have interest attached.
You only pay back what you borrow. That, of course, is a major financial incentive for asking loved ones for money!
Sure, it packs its own set of considerations too. That money might get in the way of the relationship, for one. Likewise, there’s a chance they might lose their investment! You may have no means of paying it back.
It’s about weighing up the pros and cons and going from there.
2. Government Grants
The government may hold the solution to your problem!
It won’t be easy, but there is often all sort of government grants, loans, and programs available to turn to. Generally speaking, they’re for specific purposes though.
For instance, you’re more likely to secure funding this way if your invention is of a particular ilk. If it’s set to support the country in some way, then you’re on to a winner. Current areas of interest include the environment and all things energy.
Can your invention be used to cut the government’s energy bills? If so, then there’s a higher likelihood of getting their interest.
Even so, expect hefty application processes and a long wait before the money hits your account. Start by researching the different grants available to see if any apply to you.
3. Business Networks
What industry are you in?
Who do you work with?
Think about your work colleagues and connections further afield. There may be someone around with an interest in your product and access to substantial capital.
Going to someone you know is often preferable. After all, they have a solid understanding of who you are. If they like your idea (and you!) and think it’s viable, then they’re fairly likely to offer you the funds you need.
Similarly, imagine that your product is related to your particular line of work. Turning to your business network means they have a better understanding of the purpose and functionality of the invention.
That insight gives you an edge. They’ll just ‘get it’, in a way that other sources of investment might not. It turns what could be a hard sell in other areas into a soft sell.
4. Venture Capitalists
Burned through all your connections and still no joy?
Then consider going to venture capital (VC) firms.
These are often a go-to source of funding for start-ups around the world. Essentially, venture capital firms are companies that take the money from wealthy individuals and invest it in companies they expect to turn a healthy profit.
The larger VC companies often hold staggering sums of capital at their disposal. If you can get in front of the right people, with the right idea, then all the funding you need can be yours!
However, their reputation is on the line. If they make bad investments, then all of those wealthy individuals will stop giving the VC firm their money to invest for them. Expect a battle on your hands to prove the worth of your invention.
5. Angel Investors
Angel investors are a related alternative to VC firms.
Angel investors are wealthy people (like Christopher Sarofim) who are looking to put their money into cool new companies and ideas. They’ve got the money that you need!
It’s your job to convince them to part with it. In exchange for their capital, they may take a role in the company as well. However, that isn’t always the case.
Just like the VC companies, they won’t offer their hard-earned cash to anyone. You’ll need to prove that your product will be a winner. Likewise, you’ll need to possess a certain confidence and pizazz as well. Often, these people are investing in the person as much as the product.
Inventors can leverage the power of the internet to source the money they need.
All manner of new inventions has been brought to fruition thanks to crowdfunding!
There are now a large number of websites designed to attract investment from ordinary people. In return for a small reward, they’ll offer a set amount of money to help bring a product to life.
It’s up to you to create a compelling case for why they should donate! Do it right though, and you can accrue millions of dollars in a relatively short space of time.
Final Thoughts on How to Raise Funding
There you have it: exactly how to raise funding for your new invention.
As we’ve seen, hundreds of thousands of new ideas for inventions are had every year in the US. Money is often a major stumbling block for turning that idea into reality.
However, it doesn’t have to be the case.
Thankfully, there are a fair number of source available to turn to. There’s money out there to be gained. It’s just a matter of pursuing the right channels of investment.
Hopefully, this post has highlighted exactly where to look.
Interested in reading more articles like this one? Want help securing a patent for your invention? Contact us today to see how Patent Yogi can help.