As any viewer of “Shark Tank” can attest, the variety of financial arrangements which are negotiated between inventor entrepreneurs and investors is broad. A final agreement is always the result of negotiation between the two parties. Unfortunately, many inventors go into the gunfight with a knife, so to speak, over-matched and under-prepared.
As the girl in the fairy tale ruefully remarked, “You have to kiss a lot of toads to find a prince!” Raising capital is not much different and is often a difficult, tedious, and frustrating process. You might find it helpful to approach family, friends or even patent monetization entities. Patent monetization entities, derogatorily referred to as “patent trolls,” are companies whose business is the ownership of intellectual properties and the aggressive enforcement of their rights against those who infringe upon their patents and copyrights. A PME is similar to an investment manager who owns a portfolio of market securities, a real estate investor who owns apartment houses and commercial buildings, or the estate of Michael Jackson who purchased a 50% stake in more than 750,000 copyrights including 251 songs that John Lennon and Paul McCartney wrote for The Beatles.
To raise money to get your product to market, you must be able to logically show that it will generate sales volume in the short-term and survive competitor reactions to a new market entrant. A marketing plan is a critical component of your business plan and illustrates to investors that you are a practical businessperson who understands that a good, even superior product is only the first, and not necessarily the most important, component of a successful product launch.