Sources of help for invention

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There are very few sources of help for inventions and inventors. There are, however, numerous sources of help for innovative small companies. Therefore, it may be worth setting up a company to exploit your invention. As a company with an invention at an appropriate stage of development, you may then be eligible for some assistance.

(The aim of your company can be either to make and sell a finished product, or to develop the invention to the point where a larger company can invest in it or license it from you.)

Raising finance

Raising finance for inventions is nearly always difficult but not impossible. The lower the risk to an investor, the better your chances of getting funding. There are two basic types of funding - and you may need them both:

• ‘Friends and family' investment. In the very early stages of an invention, your only hope is likely to be comparatively small amounts of money from people who (a) know you well and (b) are willing to gamble that your idea will reward them well later for a small investment now. Other investors are unlikely to be interested as there are too many ‘unknowns' and so the level of risk is too high.
• Formal investment. Larger amounts of funding may be available once your invention has (a) reasonably assured prospects - perhaps demonstrated by sales of actual product - and (b) a business plan (Part 7 ).

How much money do you need?

Many inventors harm their chances of getting funding by asking for unrealistic sums - and asking for too little can be as unrealistic as asking for too much.

It is important to calculate the cost of developing your invention as fully and accurately as you can. This may not be easy, but anyone with experience of assessing investment proposals will know immediately whether you have made the effort.

It may be helpful to seek a range of professional advice to identify all the costs involved in developing a new product or technology. If you have never done it before, it can be easy to miss or underestimate important cost headings.

You do not have to cost everything to the nearest euro, but you do need to present figures that someone with experience can look at and say, ‘Yes, that is about right'.

For example, a significant budget item may be the cost of patenting. This tends to be fairly predictable over several years, so you should be able to get realistic figures from your patent attorney.

It may be unhelpful to ask for money to meet your living expenses. Many funders will see this as increasing their risk while reducing yours. And if they think that you are not willing to make sacrifices for your invention, they may question your commitment to it. If you think some personal income is necessary, you must justify it in your business plan.

Do you need external funding at all?

The aim of a business is to make money rather than spend money, so identify every possible way of cutting your costs before concluding that you need external finance.

For example, the key to the success of many inventions is skilful marketing. If you can get orders for your product before it is manufactured, you may not need any external funding. Even if your orders are not paid for in advance, proof of those orders should make it easier to get credit from your manufacturer or perhaps bank finance to cover you until customers pay. And you could offer discounts to customers for early payment.

Your profit may at first be small, but (a) you will have launched your product successfully and (b) you will have spent only what it cost to sell the product, rather than what it cost to make it.