Common Sense Inventing - Educational articles to help Inventors make informed decisions

If you don’t have the ability to make your own sell sheets using PowerPoint, Photoshop or some other computer program you may need to hire someone.  Look at your local college or high school for a student in the graphic arts department. These are people you can hire for a fraction of the cost of going to a design firm or invention Submission Company. If you do decide to hire someone to do your sell sheets first make sure you have them sign a nondisclosure and a work for hire contract. This keeps you the sole owner of the product.

Sell sheets are basically your calling card to the company. It describes your idea in a short and concise manner. You are using this to get the company interested. The best way to describe it is think about the blurb you see on the back of a novel. It gives you an overview of the 300 pages in the book. Based on this blurb the Writer is hoping you will be interested enough to purchase the book. Go to a book store and look at the back of a number of books to get an idea of what you need to do. You need to keep your sell sheet to 2 pages or less any more than that and you are wasting the reviewer’s time.  If I told you that you can read a pamphlet or a 300 page novel to understand my products benefits which would you choose? I see Inventors have a small phone book and they can’t understand why they get their presentation back unopened or can’t understand why they got a No. When it comes to sell sheets less is more.

I am writing this in the hopes that it will make Inventors stop and examine what they are doing and if it is really helping or hurting them. Recently I was contacted by an Inventor and asked to review their product. I said I would after we signed a nondisclosure first. They didn’t want to bother with a nondisclosure because that would delay them sending me their material for review by a couple of hours, since they were going to scan it in and email it back. I insisted on the nondisclosure or I would not proceed further. They agreed and the nondisclosure was signed and returned.

They sent me some material and a video of their product. The material was concise and gave you the information needed without a lot of fluff. The video was 1 minute 7 seconds long and gave a great demonstration of the product. After reviewing the written material and seeing the video I was very impressed with their product and already had several places in mind to contact. Everything about this product is a winner and had a high chance of success, (I am not trying to be mean here)… if you did not involve the Inventor.

When I contacted them via phone I was looking forward to working with this person and seeing them succeed. I told them I thought their product was sound and had a great chance of success. This is where things went downhill quickly. When I asked what they were expecting out of a licensing deal with a company red flags started shooting up immediately. They wanted an advance that was 10 times what is even realistic. They wanted full control over the product and a royalty percentage that even the most seasoned Inventor couldn’t get.

I tried explaining how the industry really works and what they could realistically expect and that was met with, “I understand, but this is what I want.” I again tried to explain that unless you were making and selling this product yourself no company licensing your product will meet these demands. They insisted it had to be those terms or it just wasn’t going to work for them.
I conceded and told them we were at a fork in the road and they needed to follow their own path and I wished them success with that path. I even gave them a couple of companies to try.

Five weeks later I get a phone call from this Inventor and they are angry at me. I ask why. They stated that the first company I gave them reviewed the idea loved it and wanted to move forward. This confused me since getting licensing deal should be a good thing…right?

They said they received a licensing agreement that stated the same percentages I had told themwere standard in the industry and offered no advance. They said they FIXED the interested companies licensing agreement to what they wanted and sent it back to them. Then was surprised when the company contacted them saying they were no longer interested in the product and wished them success elsewhere.
The Inventor wanted to know if I had called the company ahead of them and told the company to only offer them the deal they did? (regardless of what people think I do not have that kind of power).
This Inventor wanted to know if the other companies I gave them to try would make that same kind of offer? I told them if they liked the product it would probably be in that same area. The Inventor said “Then why did you give me these companies?” (which made me ask the same question. Why did I give them any company to try?)
This Inventor has the best and worst of two worlds. They have a product companies would be interested in and a unrealistic expection of their products value.
How do you get this person to change that perception and except reality or is this a lost cause?

There isn’t a week that goes by that I don’t have several Inventors contact me either asking if I would like to invest in their idea or can I direct them to someone that would invest. The thing that troubles me is the lack of understanding of what they are asking and what it will require. I have listed some questions and information below that you need to consider before asking for an investment.  Think about any other questions you would ask or information you would want if you were the investor?

1. Not knowing how much they realistically need in the form of an investment to get their product from idea to the store.

2. Not knowing the value of their product so they can break the investment down into percentages. The Investor will need to know what percentage of the product/company they will own for their investment. Example: Does a $50,000 investment get them 10% of the company?

3. Not having a business plan detailing how they plan on spending the money once they have the investment.

4. What ROI (return on investment) the investor can expect and how soon after the investment can they expect to see a return?

5. Will you need more than one round of investment money?

6. Do you have a distribution network for your product?

7. Do you already have other Investors?

8. Do you have a working model?

9. What protection do you have for the idea, if any?

10. Who are your competitors?