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Getting Investors – Surprising Types
Michael J Foycik Jr
by Michael J Foycik Jr.
September 16, 2013

The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.

So, you need an investor.  Probably to start a new business and launch a new product.  Here's a very short yet useful guide to some surprising types of investor.

Get a distributor.  Yes, they don't sound like investors, but it helps to see them that way.  Why so?  A typical one will bear the costs in some way, and help sell the product.  These things are what a good investor would do.  Typically, with a new product, you can expect to get anywhere from 2 to 9 percent of the selling price, though this can vary. 

Sell though a TV marketing company – you know the ones.  You see them on late night television, or on cable channels that sell goods.  And yes, they don't sound like investors, but it will help to look at them that way.  A typical one will help with the costs in come way, and perhaps even with the development and testing of the product.  These are things a good investor might do.  Typically, one might expect anywhere from 2 to 4 percent of the selling price. 

Go to an investment club.  There are surprisingly many if you look.  Try online searches, and word-of-mouth if necessary.  Ask around, especially in local businesses, where the owner might well belong to such an investment club.  A good investor will take about 10 to 50 percent of your business, in exchange for investment money and possibly expertise.  A good investor will know how to help you succeed! 

Press releases!  There are companies that do those.  The more press releases, the better.  Put up a web site so investors reading the press releases can find you. 

Be your own investor!  Surprisingly, if you start small, you can experience exponential growth.  Say, start with one store in a chain, offering them goods on a consignment basis.  You may well be able to fund the product costs on such a small basis, until the revenue comes in.  If the product sells, the store will usually want to expand to a few other stores in their district.  Again, you'll be ready to expand production as the revenue comes in.  Slowly but surely!  If the product continues to sell in those stores, that chain may take it district-wide.  Again, revenue comes in, and you can fund the production yourself.  Finally, sales may expand country-wide, a huge jump.  By then, you will either have the money to fund it yourself, or a line of investors eager to fund it for you.

Caveat: if your product is new or improved, you certainly should consider filing a patent application.  There is a first-to-file system under the new AIA (America Invents Act) patent law.  That means anyone can steal your idea and file a patent application first.  So, be the first one to file!  Why take chances?  Provisional patent applications have a very low cost, and utility patent applications are somewhat higher in cost but are excellent if you can afford that cost. 

The author is a patent attorney with over 28 years experience in patents and trademarks. For further information, please email at IP1lwyr@gmail.com, or call at 877-654-3336.
 
 
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