Posted on 09/11/2007 11:22:24 PM PDT by ROTB
I think I have a nifty idea for a software project, but since I am not independently wealthy AND I don't feel like having it ripped off so that I wind up with nothing, I was wondering if my fellow Freepers could advise me on how I could wisely go about getting funding for this project, and protect myself. If I should only stick with close friends and relatives, then I will do so. Thank you.
bump
First, get your friends and relatives to sign a Non-Disclosure Agreement (NDA). Next, contact someone whose judgement you trust and get him/her to sign the NDA and then explain what your idea is and why it is good and marketable. I have seen a number of “can’t miss ideas” die because they really were not that good to start with or the idea was already in the marketplace. Good luck.
It is by far best to get this funding from your private sources, first. At least if you lose control of the company, it’s to a family member or a friend.
And remember: When you look to venture capital, you need to realize you will wind up with a minority ownership in your own company, anyway. 95 times out of a 100 it is this way.
Check into software patents by doing a search. You may find parts of what you are doing are going to cause problems later. Don’t screw your investors because you’ve been lazy, resulting in a lawsuit.
However, if you have something patentable, do it. I hate the concept of software patents over that of physical, hardware-type patents (everything else tends to fall into the “tangible” category), but they can be quite helpful. Once you get it (or them), that will help you to get venture capital on better terms.
Be careful who you share your idea with. When you get it done, copyright it (little help, save for outright infringement).
If it is quick to make, you may just want to do it yourself using the fastest tool you can find. If you are to market before anyone else, you don’t have to worry quite as much about competition, but as you become more noticed, the patent trolls will come knocking.
May you have the success you are seeking.
If you only have an idea, it may be difficult to protect other than to apply for patent (expensive and long and not a foolproof process). If you have key pieces of code, you may want to send some for registered copyright (very inexpensive and reasonably fast) before you let someone else in on it.
Crucial : decide approximately how much funding you will need and over what period of time (adjust both numbers upward somewhat to give yourself breathing space.) If most of the project or a working model of it can be done with funding from your friends and family, go with it before applying for first round of professional VC. It will give you a chance to register and secure the rights to your idea, work product and you’ll give away much less of it as a result.
Also, look first for “angel investors” before going to high profile VC firms.
This may be a good start :
http://www.google.com/search?hl=en&q=venture+capital+angel
I know we hate ‘em, but at times like this they’re indispensable: first, get a good lawyer to make sure all the i’s are dotted and the t’s crossed throughout the process (and, who knows, he or she might turn into an investor). And good luck.
I'm pretty sure this is sarcasm.
wow. No Sarcasm Left Behind here.
Find a copy of the book “Patent it Yourself” by David Pressman.
My very large company wants all inventors to write (first drafts) of our own patent applications.
Years ago, I successfully raised millions of dollars in funding for a business using their guide to business plan writing entitled "Business Plans that Win $$$." (Unfortunately, the business was not as successful in staying solvent as the business plan was in raising money, but that's another story.)
If they have a chapter in your area, you should definitely head to one to network. If not, use the resources at the website.
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