Determining whether your invention will be successful or not is an integral part of being an entrepreneur. Here are three reasons inventors are outsourcing the review process to increase efficiency.
When entrepreneurs and companies invent new products or technologies, they are understandably reticent to share their ideas with outsiders. After all, the business landscape is cut throat. They do not want to risk giving away their competitive edge. Still, most entrepreneurs are aware they need some feedback to ensure that their ideas are viable. They may form an internal review team to analyze their prototypes and conduct a market analysis.
While this choice may seem logical, internal invention reviews can be a waste of time and money. External reviews are a smarter choice. For instance, consider independent taste testers, who food companies outsource sensory testing of their products to in order to capture a broad and objective range of preferences. Beware of in-house reviewers, who are often incapable of delivering the objective analysis and insights you need to make sure your product does not fail.
We will come back to the point about internal reviews inherently being nonobjective. There are additional reasons to outsource the invention review process. For starters, internal reviews can require significant time and money. Since the team members tasked with the review are employees, they may have to balance this assignment with their other responsibilities.
Generally speaking, internal reviews can take up to 30 hours at minimum, although they can take up to 30 days at larger companies. If you are paying employees over $75,000 per year (and, in the case of an attorney, far more) and you assign several people to the task, you are looking at thousands of hours and potentially hundreds of thousands of dollars to conduct your internal reviews, when they could be working on developing the top ideas and technologies instead. Be aware of where you’re spening money, as very little of your review expenses should be on the front end.
In addition, internal reviewers are not necessarily trained to conduct these types of analyses. A quality product study includes thorough research into your market, competitors and patent prospects. Someone who is not trained to vet ideas for commercial potential will not be able to generate the level of insights and recommendations you need to screen a technology. By comparison, external teams specialize in product analyses.
Privacy can be a concern when inviting outsiders to review your ideas. However, a non-disclosure agreement or confidentiality clause can prohibit external reviewers from revealing any sensitive and proprietary information. There are both legal and business incentives to adhere to these guidelines as the reviewers want to build a reputable business and are not in the business of stealing ideas for themselves. If the right safeguards are in place, you can trust that the review process will not expose your business’s important competitive information.
Here are three ways in which an outside review is more advantageous than an internal report.
Unlike your team members, review agencies focus solely on compiling invention reports. They can turn around an analysis much faster than your internal staff, and it will include a SWOT analysis, competitive research and intellectual property (IP) research – all the information you need to decide whether to move forward.
While some consultants charge high rates, many third-party vendors offer fast and affordable services. Instead of paying salaried employees to produce a lackluster review, you can secure a top-quality analysis at a fraction of the cost, freeing up your employees to concentrate on the development of your best ideas and IP assets.
I promised we would come back to this and saved it for last because I cannot stress it enough. When it comes to evaluating your commercial prospects, objectivity is everything. You need input from professionals who have no stake in the product’s performance. A third-party team is solely concerned with getting you informed answers and giving them to you with no pretense. Their jobs and egos do not depend on your product’s success. Those are the people you want reviewing your invention because then you will have solid feedback and perhaps fresh insight into whether your idea can be successful.
The worst thing you can do for your company is go to market blindly or with misinformation. Sourcing high-quality evaluations from professional invention reviewers will provide you with the necessary knowledge to help your company succeed. Whatever the reports contain, it will give you the knowledge to make informed decisions and develop ideas the world really needs and wants.
Inspiration is a funny thing. Sometimes it comes when we least expect it.
For me, the “a-ha!” moment often hits in the dead of night, or when I’m in the middle of a meeting or driving. We Americans are a nation of problem-solvers, and it’s no wonder that we’ve come up with some of the world’s best ideas. The list of world-changing inventions dreamed up by Americans is astounding.
Sometimes, what you or I think of as a revolutionary idea has already been tried; other times they’re not practical, not marketable or are hamstrung by red tape and competition. But every once in a while, somebody comes up with something amazing and makes millions. It’s this quest for fame and fortune that drives many people to take their idea for a “better mousetrap” and go for it.
TV shows such as “Shark Tank” have propelled many inventors to riches and glory, as celebrity investors decide whether the ideas are worth a shot. An industry has even sprung up around the potential profit in new inventions, promising to help get your idea patented, protected and marketed.
But, as some budding Edisons have discovered, many “invention promotion” companies are nothing but scams, designed to hook the hopeful into spending big bucks with dreams of getting their products to market.
Back in March, the Federal Trade Commission busted a Miami Beach, Florida-based company called World Patent Marketing, which had allegedly promised would-be inventors it could help its clients successfully develop and market their products. Instead, the FTC told a federal court, all but a few consumers found themselves shelling out big bucks with nothing to show for it. In all, the FTC’s complaint alleges, the scheme bilked consumers out of more than $10 million. The complaint also accused parent company Desa Industries and its CEO Scott Cooper of involvement in the scheme.
The company is accused of using a variety of tactics to lure new customers and reassure existing ones, such as made-up “success stories” about people the company had helped. Adding insult to injury, some customers claimed that when they tried to complain or wrote negative online reviews, the company used intimidating tactics to shut them down, including threatening them with lawsuits.
One potential inventor told the Broward County, Florida, Sun-Sentinel that he had given $300,000 to the company to promote his idea for a net device that could be attached to a cellphone case to hold keys and other small items, only to come up empty-handed.
For its part, Cooper’s legal team has noted in court filings that the invention-promotion business is risky, and that fact is made clear on its website and promotional materials as a warning to potential clients.
If you do come up with an extraordinary idea, the U.S. Patent and Trademark Office advises that you proceed carefully. The agency has a brochure at https://www.uspto.gov/sites/default/files/documents/ScamPrevent.pdf that lists some of the warning signs of an invention-promotion scam, and notes that the law requires invention promotion companies must disclose the following information:
If you want to find out more, visit https://www.consumer.ftc.gov/articles/0184-invention-promotion-firms, as well as http://ipwatchdog.com.
Contact Bill Moak at firstname.lastname@example.org.
There are many businesses focused on helping inventors develop and monetize their ideas. There are companies that, for instance, help people seek patents on their inventions, license their inventions, turn their ideas into tangible products, and promote those products. World Patent Marketing in Florida bills itself as one of those companies. But according to a complaint filed by the Federal Trade Commission this month, World Patent Marketing is in fact “an invention-promotion scam that has bilked thousands of consumers out of millions of dollars.” The FTC charges World Patent Marketing with committing unfair and deceptive trade practices in violation of Section 5(a) of the FTC Act. On March 8, the Southern District of Florida found that the FTC was likely to succeed in proving this charge and issued a temporary restraining order.
Read more at http://www.jdsupra.com/legalnews/court-issues-temporary-restraining-50911/
Most high growth start-ups are fueled by capital – product development, staffing, go-to market. There are many avenues for raising capital and an increasing number of unique investment models available for entrepreneurs to pursue.
Listen to a panel discussion featuring 4 professional investors in early stage businesses. Hear what models they use to invest in, support, and help grow the companies they work with. What financing models and structures are available to entrepreneurs? What criteria to does each investor look for in transaction? What are the best ways to engage with sources of outside capital?
Seating will be limited to 70, so please register early to reserve your spot. Agenda as follows:
Entrepreneurs seeking funding for their startups now have another place to go: Indiegogo.
“Wait,” you may say, “can’t I already use the crowdfunding platform to raise money for my dream product?” That’s right, but today Indiegogo launched an equity crowdfunding service, which utilizes new government rules that took effect in May and allow anyone to invest in startups. Previously, only accredited investors who met certain financial requirements were eligible to back businesses in this manner.
“Our mission has always been to make it easier for individuals to raise money for projects they are passionate about, and this is the latest way we’re helping entrepreneurs access the financing they need while also giving backers the chance to invest in new companies,” Indiegogo CEO David Mandelbrot said in a press release. “Since Indiegogo first launched we’ve wanted to offer these sort of investments, and we’re very excited to be officially giving the millions of people who visit our platform every month the chance to get involved with equity crowdfunding opportunities.”
As of today, about $11.7 million had been raised for businesses using equity crowdfunding, according to NextGen Crowdfunding. This count includes three projects that have raised $1,000,000, the maximum amount allowed by law.
For its new portal, Indiegogo teamed up with MicroVentures, which helps companies raise funds using equity crowdfunding. Equity crowdfunding campaigns will be listed on both sites, with transactions made through MicroVentures. Legal documents will also be automated through an online questionnaire for funding-seeking companies through iDisclose.
“It’s great to see an industry leader in the rewards crowdfunding space jump into the equity arena,” says Kendall Almerico, CEO of BankRoll Ventures and an attorney who works with crowdfunding campaigns. “The long-term success of the JOBS Act laws and regulations will be accelerated when people already familiar with pre-purchasing goods on rewards-based sites like Indiegogo move to actually investing in small companies and emerging businesses through equity crowdfunding.”
During a previous interview with Entrepreneur, Mandelbrot said he wants Indiegogo to be a “springboard” for business owners.
More than $1 billion has been raised from more than 8 million people on Indiegogo, according to a press release. The company says it is “well-positioned” to introduce entrepreneurs and investors to equity crowdfunding. The service is launching with four offerings, according to the release:
We Fact-Checked Seven Seasons Of Shark Tank Deals. Here Are The Results.
On Shark Tank, the deal you make on camera often isn’t the deal you end up getting — if it happens at all.
Photo by Frederick M. Brown/Getty Images)
The hit ABC show that gives entrepreneurs a chance to pitch celebrity investors depicts some business owners walking away with life-changing deals. But more often than not, those hand-shake agreements change or fall apart after taping.
FORBES found that 319 businesses accepted deals on-air in the first seven seasons of Shark Tank. We spoke to 237 of those business owners and discovered 72% did not get the exact deal they made on TV. But tweaked terms or dead deals don’t necessarily spell doom for a business; for many contestants we spoke to, the publicity of appearing on the show ended up being worth more than the deal.
Shark Tank New Dat: Nick DeSantis, Forbes staff
About 43% of the people we spoke with said their deals didn’t come to fruition after the show. They attributed this to sharks pulling out of the agreement or changing the terms to ones that didn’t work for them. Others canceled deals after getting term sheets that included unappealing clauses. And occasionally the deals ended amicably.
Another 29% of the people FORBES interviewed said the equity and investment amount offered on-air changed after taping — but they chose to take the deal anyway. They said that the changes often occur during negotiations or in due diligence, an investigation into a person or business before signing a contract.
Although our analysis was not exhaustive (FORBES was able to interview 74% of contestants who got deals on camera), the numbers suggest that some investors are less likely to change their deals after the cameras stop rolling. Mark Cuban, who by our count closes more deals than any other shark, changed the agreements he made on-air change only 12% of the time.
Design: Nick DeSantis, Forbes staff
ABC is transparent about the due diligence process and isn’t accountable for how deals pan out during negotiations. ABC did not return requests for comment by time of publishing.
We contacted as many of the 319 businesses as possible, but some refused to share how and if their deals evolved, and others simply did not respond. While the results aren’t comprehensive, this is the most complete record of how often deals change after taping and why that occurs.
The goal of entrepreneurs going on Shark Tank is to make a deal and see it close. But if it falls apart, it’s not always a tragedy. About 87% of the businesses we spoke to that didn’t get deals are still operating. The remainder have shuttered, were acquired or sold.
Matt Canepa and Pat Pezet appeared on season four of Shark Tank to pitch their company Grinds, which sells chewable coffee pouches. They agreed to give Daymond John and Robert Herjavec 15% equity for $75,000. However, the deal died in negotiations.
“Pat and I went on the show 100% wanting to get a deal,” Canepa said. “Regardless of whether or not you get the deal, there are a lot of success stories.”Design: Holly Warfield, Forbes staff
In 2012, before their episode aired, Grinds made about $300,000 in sales. The month their segment premiered, the company saw $330,000 in sales.
Grinds brought in $1.35 million the year their episode aired, and have watched that number rise. This year, they are expecting do over $4 million.
Grinds isn’t alone. Nicholas and Alessia Galekovic, cofounders of the grooming accessories company Beard King, made an agreement with Lori Greiner during season seven last year. But around the time they filmed their episode, business took off, and the deal no longer met the needs of the company.
Design: Holly Warfield, Forbes staff
The agreement broke down in negotiations. But in the year after the episode aired, the company did around $700,000 in sales. This year, they are expecting over $1.6 million.
“I think that [Shark Tank is] absolutely amazing,” Nicholas said. “For anyone considering trying out or going for it: It’s well worth it.”
We were invited to participate last season and now the show is a huge success. It is a great premise, 3 venture capitalist personally product test new outdoor adventure products. Talk about Shark Tank, last season they tested a new shark repellent device in the ocean with school of real mean looking sharks, giving new meaning to the term “wetsuit” for one of the capitalists. These guys are crazy and a lot of fun. Check out the show here http://cnb.cx/2eezoKK
They are looking for all types of outdoor products including but not limited to; camping, hiking, adventure, recreation, outdoor transportation, off roading, renewable energy, survival, etc. I suggest you watch the show and present accordingly. Here is the link to apply www.AdventureCapitalists.com
Harry Wants Women
What a dream come true for the right women, Harry Connick Jr. is looking for women inventors with a great story to tell for his new daytime talk show. This is great exposure! Here is a link to the talent search http://bit.ly/2ddYLZb and here is a link to the show’s website https://www.harryconnickjr.
Dave Yonce Show
Below is the information they sent me about the show. Unlike most product hunts, shows are looking more for personality. Their guide lines are an education in themselves that everyone should read.
Asylum Entertainment and a major cable television network known for its loud, creative content is on the hunt for American entrepreneurs with well-developed concepts or prototypes for new inventions. To be considered, the invention must solve a problem, make a job more efficient, or make life more fun. Areas of interest include, but are not limited to, electronics, weapons, outdoor recreation, adventure, home products, automotive, and power tools.
If selected to appear on the program, Oklahoma-raised inventor and entrepreneur, Dave Yonce, will invest money and time into you and your product, developing it into a working prototype, and in some cases, partnering with you to build your business.
For more information, email: Casting@tikicasting.
Thank you in advance!
Apply to present at the upcoming 2016 Florida VentureTech Showcase
at CAMLS (Center for Advanced Medical Learning and Simulation), in downtown Tampa on November 1st from 1:30 P.M. – 6:00 P.M.
The showcase is a capital acceleration competition and business-networking event co-hosted by Space Florida and the Florida Venture Forum. The event will feature presentations by some of Florida’s most promising growth-stage companies. Additionally, a cross section of investors will be in attendance. Troy Knauss, instructor, with the Angel Resource Institute, will be the special guest speaker!
Presenting companies will compete for the
Space Florida Accelerating Innovation Awardtotaling
$100,000 for the Winner and $50,000 for the 1st Runner Up!
Presenters will be chosen from a pool of applicants by a selection committee evaluating growth-stage companies from throughout the state of Florida. Selection criteria for growth stage companies are listed on the Forum’s website. Selection preference will be given to those growth stage companies in information technology and health technology, knowledge-based services, space transportation and advanced aerospace platforms, satellite systems and science payloads, ground and operations support systems, agriculture, climate/environmental monitoring, civil protection and emergency management, International Space Station and human life science (including medical research), communications, cyber security & robotics, adventure tourism, clean /alternative energy applications, advanced materials and new products.
FINAL PRESENTER APPLICATION DEADLINE:
Friday, October 14, 2016
We just wrapped up our Deal Flow Summit in NYC and it got me thinking about how pitches go wrong. Here are 7 ways to bomb a pitch:
1) Dear Sir/Madam: If I read Dear Sir/Madam or similar generic greetings, it’s an instant-archive. It’s not because I think so much of myself that I need you to spell my name right but I do need you to address it to me. Dear Sir/Madam is the clearest possible signal you could send that you are blasting your pitch to anyone and everyone.
2) Buy Now! and other used-car tricks: investing in or acquiring a business is a serious, long-term investment decision. Pressure tactics and hard sells are not only inappropriate, they’re often counter-productive. Respect the process and don’t pressure the investor the way a used-car salesman would.
3) Fail to follow-up: You can make the best pitch of your life and have the investor on the edge of his/her seat, but if you don’t follow up it could all be for naught. Remember that your pitch settles in somewhere between the other 20 meetings, phone calls, and pitches that a busy executive will have any given day.
4) Cheap Out on Presentation: It is inexcusable today to have a cut-rate presentation. Whether you’re using PowerPoint or Indesign or a top-end software, make sure that you take the time to edit your presentation and make it look professional. Send it around to friends and family. An executive that we’re partnered with recently sent his presentation to his mother for review and guess what? She caught more mistakes than I or anyone else who reviewed it did. Lesson: it only costs you time to edit your presentation and it can cost you millions to skip this step.
5) Talk about everything but the main event: You’re meeting with the prospect to talk about your company or deal and you want to build rapport so you talk about your kids, what sports you both enjoy, and every other topic of conversation EXCEPT what you’re both there to discuss. I don’t know how many meetings I’ve thoroughly enjoyed but left without any idea what the company did, what they were seeking, or how I could participate. When you’re meeting with a busy executive you’re working in a set time window and if you spend 50% or more of your time building rapport, you don’t get any extra time or brownie points for knowing that he likes fishing or has a cousin who lives in your hometown.
6) Forget the financials: When I’m meeting with a potential acquisition target or a company seeking funding, I’m zeroing in on the financials. Too often, I attend what I expect to be a formal, serious meeting to discuss a potential investment but the other party is ill-prepared to discuss the numbers. Not only is this a sign that you’re unprepared, it’s a waste of everyone’s time. I and a lot of other potential investors will likely reschedule the meeting for a time when you have the necessary details to have a real discussion. Some investors, though, won’t give you a second shot.
7) Meet with the wrong person: I recently scheduled a call to introduce a company we’re invested in with what would be a huge account. The team prepared for the meeting and when I jumped on the conference call we quickly learned that my contact wasn’t the decision-maker and was unfamiliar with the company’s sector. The lesson I took away is to make sure that the person you’re meeting with is A) qualified to make the decision B) familiar enough with the sector and C) taking the meeting seriously. In my case, the person we were meeting with was a principal at the firm (meeting criteria A) but a friend and thus willing to take any meeting I set up (violating criteria C) and unfamiliar with the sector (violating criteria B).
I hope that these lessons I shared help you craft an amazing pitch.
The Private Equity Investment Group
Key Biscayne, FL