Patent Sponsorship

Posted on by Seyi Oduyela
Sponsorship for Patent
Sponsorship for Patent

Sponsorship for Patent

Often inventors need to raise some early investments to help pay for  prototypes, patents or other items to help get the project off the ground. You  have three goals: one, avoid trying to write a 40 to 50 page business plan, two,  to show you are serious about taking your product to market, and finally, you  need to show your idea has a real chance to succeed.

A brief history

Provide a short summary of why you came up with the idea, what made you use  your particular product design, and why you think it will sell. Include a list  of any industry related people you’ve worked with, such as sales  representatives, retail store owners, distribution people, inventors who have  succeeded in the market, or key end-users.

A competitive products chart

Analyze the products that are already on the market, what they cost and what  their strong and weak points are. Include your product in the chart. Also try to  get some of the more popular products either the actual product or brochure,  printed web pages or ads for the competitive products.

Current sales efforts

If you have done anything to sell your product, list those efforts here. If  not, list any feedback you have from industry people or end users. If you are  going with end-users, try to have them evaluate not only your product, but also  the competitive products so that they can rate your product above others.

Transitional sales plan or a licensing plan

If you plan on taking the product to market on your own you need a plan to  show how you will start to sell the product until its sales expand into a large  market. This plan doesn’t have to be long, usually you can show your plans in  five to eight bullet points showing the steps you will take to market the  product. Be sure to list in this plan any contacts or connections you might have  made that will assist you.

If you plan on licensing the product you should list at least three potential  licensing targets. You need to show how you will meet the key contacts at those  companies. This is usually done either by showing you have a personal connection  into the company, perhaps you know a sales rep, or other employee, or a major  customer of the targeted company, or by listing the trade shows you will attend  to start the licensing process moving forward.

Show the product’s expected sales price and projected  costs

The projected costs should be no more than 20% of the products final sales  price. You can estimate the products sales price by comparing it to other  products in the market, both with competitive products and with products very  similar to yours in construction or manufacturing techniques. One effective tool  is to have a focus group evaluate your product against others and then list them  by order of value, from the highest price product to the lowest. You can use the  product rated just above and just below you to estimate your price. You can get  the manufacturing cost by getting quotes for several potential manufactures for  5,000 or 10,000 units. Don’t use a price for a low number of units as the price  will be too high and you probably won’t meet the criteria that manufacturing  costs can’t be any more than 20% of the final retail price.

An orderly financial plan

Don’t go wild here and come up with pages of data. Instead you just want a  simple layout. For example:

  • Finalize prototype :      $5,000.00
  • Apply for provisional      patent : $3,500.00
  • Arrange for first      small production run : $12,000.00
  • Attend Las Vegas trade      show : $15,000.00 including brochures, booth and  display
  • Start larger      production, establish operating cash : $20,000.00

Ask for a specific investment

You don’t want to ask for all the money, as then you will have to give up too  much of the company. But usually you want to ask for $10,000 to $25,000 for five  to ten percent of the current shares of the company. Be careful here to mention  the shares of the company will be diluted (become smaller) as more and more  shares are sold to raise money. For example today you may sell 10% of the shares  and you own 90,000 and the investor 10,000. But if you sell another 10,000  shares, then there will 110,000 shares, with the each investor owning about 9%  of the shares and you about 82%.

Don Debelak is a well-known invention expert who has worked with new products  and inventions for over 25 years and is the author of four of the best-known  invention books of the last 15 years. Don runs the One Stop Invention Shop, http://onestopinventionshop.net, with a team of expert  associates. The One Stop Invention Shop provides great service along with lots  of free information to help inventors.

Don Debelak is also a registered patent agent and offers a variety of patent  services through http://patentsbydondebelak.com. Don offers free 15 minute  consultation to new clients.

Credit – Debelak, Don  – November 8th, 2013.

 

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