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Put yourself in my shoes!
by rougie » Tue Jul 29, 2008 1:37 pm
- rougie
- White Belt
- Posts: 29
- Joined: Sat Mar 15, 2008 6:29 pm
Hello,
Put yourself in my shoes, what would be your requests towards a potential investor given the scenario I am about to present.
Put yoursel in my shoes, you have been engineering a high tech product for 8 years in a basement(approximately 14 hrs per day) and the product's orientation and design have come from your own tedious decision making. Your product involves color graphic LCD's with complex in house graphic's libraries that you have designed and programmed from scratch(meaning that some of the features in this display don't exist anywhere else in the wolrd). Further, all of your circuits and micro processors, including CPLD's and FPGA's have been selected and prorammed by you. The electronics hardware has been carefully assembled by you aswell. In short, *you* have made the prototype happen! Meaning that what many investors don't get to see very often from inventors, *you* now have made it a possibility and a reality by presenting them a working (almost ready for production) prototype. You have gone throught the trouble of meeting with a patent lawyer for 1.5 years and spent 25K on a patent so you can do the best you can to protect your invention. Since the functionality of the invention is related to your work, you have also integrated 25 years of experience in it.
You realize, that you have done the work of practically 1.7 engineers for an 8 year period. You also realize that if any small to medium sized electronic company tried to do this project, it would cost them approximately 1 Million dollars in salaries, and furthermore due to the great possibilites of pit falls that encompass the hight tech invention cycle, there would be no warranty that the million dollars of salaries would actually put a prototype on the table as you have accomplished.
For this reason, you also realize that inventing a high tech product involves so much more energy and time as opposed to a new type of air freshener or some type of "clip on" shelf device.
And therefore putting yourself in my shoes, what would you request to a potential investor. What type of benefits or rewards would you reserve to yourself for being the brain child behind your invention.
In any case here are some of my requests I would propose to new investors. Feel free to add-on any others that should be there.
- And all shares are 50/50. Would this be a possibility?
-No Shot gun clause!
-If I *the inventor* is for any reason to leave the company, as a reward to me (since *I* made the prototype possible) I would like to be able to continue the product with my new company with free licensing! The original company can also continue selling the product(s) and I would help them get on track with the technical aspect by training their new technical personel so they can be independant!
So, put yourself in my shoes, I would really be interested in your opinion on what you would be prepared to ask your new investor given the scenario above!!!
All feedback greatly appreciated and all insight relating this issue would greatly help me focus on what are realistic demands in a partnership of this sort!
Best regards, and thankyou in advance for your input.
Oh yeah and one more thing, I do not except that all the work that an inventor in my position be recognized as
*sunk costs*
Rob
Put yourself in my shoes, what would be your requests towards a potential investor given the scenario I am about to present.
Put yoursel in my shoes, you have been engineering a high tech product for 8 years in a basement(approximately 14 hrs per day) and the product's orientation and design have come from your own tedious decision making. Your product involves color graphic LCD's with complex in house graphic's libraries that you have designed and programmed from scratch(meaning that some of the features in this display don't exist anywhere else in the wolrd). Further, all of your circuits and micro processors, including CPLD's and FPGA's have been selected and prorammed by you. The electronics hardware has been carefully assembled by you aswell. In short, *you* have made the prototype happen! Meaning that what many investors don't get to see very often from inventors, *you* now have made it a possibility and a reality by presenting them a working (almost ready for production) prototype. You have gone throught the trouble of meeting with a patent lawyer for 1.5 years and spent 25K on a patent so you can do the best you can to protect your invention. Since the functionality of the invention is related to your work, you have also integrated 25 years of experience in it.
You realize, that you have done the work of practically 1.7 engineers for an 8 year period. You also realize that if any small to medium sized electronic company tried to do this project, it would cost them approximately 1 Million dollars in salaries, and furthermore due to the great possibilites of pit falls that encompass the hight tech invention cycle, there would be no warranty that the million dollars of salaries would actually put a prototype on the table as you have accomplished.
For this reason, you also realize that inventing a high tech product involves so much more energy and time as opposed to a new type of air freshener or some type of "clip on" shelf device.
And therefore putting yourself in my shoes, what would you request to a potential investor. What type of benefits or rewards would you reserve to yourself for being the brain child behind your invention.
In any case here are some of my requests I would propose to new investors. Feel free to add-on any others that should be there.
- And all shares are 50/50. Would this be a possibility?
-No Shot gun clause!
-If I *the inventor* is for any reason to leave the company, as a reward to me (since *I* made the prototype possible) I would like to be able to continue the product with my new company with free licensing! The original company can also continue selling the product(s) and I would help them get on track with the technical aspect by training their new technical personel so they can be independant!
So, put yourself in my shoes, I would really be interested in your opinion on what you would be prepared to ask your new investor given the scenario above!!!
All feedback greatly appreciated and all insight relating this issue would greatly help me focus on what are realistic demands in a partnership of this sort!
Best regards, and thankyou in advance for your input.
Oh yeah and one more thing, I do not except that all the work that an inventor in my position be recognized as
*sunk costs*
Rob
Last edited by rougie on Fri Sep 11, 2009 8:51 am, edited 1 time in total.
by CriterionD » Tue Jul 29, 2008 10:26 pm
-
CriterionD - Blue Belt
- Posts: 431
- Joined: Mon Feb 19, 2007 6:23 pm
- Location: Tempe, AZ
I guess I'll copy and paste the crux of my reply from the other board you posted this thread on,
The main point is, effort is not in itself its own reward here. Nobody's just going to pay you anything just because you put effort into it. They are going to pay you something only in the event that what you have put effort into is more valuable to them than what they would be paying you.
But, your product is not valuable to them because you put effort into it. Its valuable to them because it allows them to take advantage of a market opportunity that they would not otherwise be able to take advantage of.
Once they know for sure that they want to take advantage of this marketing opportunity by marketing your product or developing something substantially similar themselves, and decide they are willing to invest X amount of dollars, then they will weigh how much money it would cost them to develop this product themselves against how much money they feel you would accept against how long it would take them to get to market with your IP versus without it, etcetera.
Of course, some companies would prefer to take care of product development in house because they assume you will not find another acquirer any time soon, and/or because they do not trust that the work you have done is foolproof and want the possibility for better quality control, etcetera.
A potential acquirer/licensee may care about how much effort and money they would have to invest to commercialize this product without you. But its just one of many factors that determine whether or not they might be interested in acquiring your IP, as well as what they may be willing to pay you for that.
But just because you put effort into whatever, does not in itself mean that you have anything that is worth anything other than maybe a feeling of accomplishment and/or martyrdom. If you build it, that doesn't mean anyone will come. It depends what you build. Any investor with a brain knows this. If you approach them and say, or sound like you are saying, that your product will make you money because you put so much effort into it, they will know, or assume, that you are either missing the point, or are simply an insecure guy looking for sympathy moreso than financial rewards.
What you need to know is, you are placing the emphasis in the wrong place when you communicate like this and appear to emphasize what is not relevant to a potential licensee.
The main point is, effort is not in itself its own reward here. Nobody's just going to pay you anything just because you put effort into it. They are going to pay you something only in the event that what you have put effort into is more valuable to them than what they would be paying you.
But, your product is not valuable to them because you put effort into it. Its valuable to them because it allows them to take advantage of a market opportunity that they would not otherwise be able to take advantage of.
Once they know for sure that they want to take advantage of this marketing opportunity by marketing your product or developing something substantially similar themselves, and decide they are willing to invest X amount of dollars, then they will weigh how much money it would cost them to develop this product themselves against how much money they feel you would accept against how long it would take them to get to market with your IP versus without it, etcetera.
Of course, some companies would prefer to take care of product development in house because they assume you will not find another acquirer any time soon, and/or because they do not trust that the work you have done is foolproof and want the possibility for better quality control, etcetera.
A potential acquirer/licensee may care about how much effort and money they would have to invest to commercialize this product without you. But its just one of many factors that determine whether or not they might be interested in acquiring your IP, as well as what they may be willing to pay you for that.
But just because you put effort into whatever, does not in itself mean that you have anything that is worth anything other than maybe a feeling of accomplishment and/or martyrdom. If you build it, that doesn't mean anyone will come. It depends what you build. Any investor with a brain knows this. If you approach them and say, or sound like you are saying, that your product will make you money because you put so much effort into it, they will know, or assume, that you are either missing the point, or are simply an insecure guy looking for sympathy moreso than financial rewards.
What you need to know is, you are placing the emphasis in the wrong place when you communicate like this and appear to emphasize what is not relevant to a potential licensee.
by Patent_Attorney » Thu Oct 16, 2008 5:16 pm
- Patent_Attorney
- Green Belt
- Posts: 134
- Joined: Tue Oct 14, 2008 12:17 pm
I am a patent attorney and I would prepare your patent application for a fraction of $25K ($2800 to be exact) plus USPTO fees and drawings.
Let me know if you need assistance.
Thanks
Let me know if you need assistance.
Thanks
Re: Put yourself in my shoes!
by Roger Brown » Tue Dec 14, 2010 7:05 am
-
Roger Brown - Black Belt
- Posts: 1208
- Joined: Mon Oct 30, 2006 2:53 pm
- Location: USA
This thread was started in 2008. I would be interested to find out if rougie
got his investors, did it himself, got it licensed or dropped the idea completely. Does anyone have an idea what happened?
got his investors, did it himself, got it licensed or dropped the idea completely. Does anyone have an idea what happened?
Come visit my sites at http://www.RogerBrown.net
or http://www.looking2license.com
I have gotten 9 products licensed spending less than $100 on each, you can too.
or http://www.looking2license.com
I have gotten 9 products licensed spending less than $100 on each, you can too.
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