FOR INVESTORS

FUND AN INVENTION

The Big Idea.
Funding Xegate Innovation!

Strategies for Funding the Commercialization of an Invention
Taking your invention from an idea to a marketable product can be difficult and expensive. In order to get the product into the consumers' hands, money will need to be spent on development, production and marketing. Further, a number of other costs will inevitably arise, from protecting your intellectual property through patents, copyright and trademarks to taking time away from your full-time job to work on the development of your new business.

A GOOD COMMERCIALIZATION STRATEGY WILL ALMOST ALWAYS INCLUDE PATENT PROTECTION AND A ROUGH ASSESSMENT OF THE ASSOCIATED COSTS.

Bringing an invention from an idea to a consumable and marketable product can be challenging and expensive. Many inventors who do not have the means to self-fund mistakenly believe that this prevents them from pursuing their idea. Thankfully, there are several options available to secure funding, including:

  1. Using personal resources
  2. Network funding
  3. Private investment/loans
  4. Government funding
  5. Business financing
  6. Crowdfunding
  7. Other sources of funding

Most importantly, having faith in your project will help get others excited and on board with supporting the idea and can be the key to your success.

TYES OF INVESTORS FOR STARTUPS

What different types of investors are there for funding your startup?
There’s more than one type of investor to fundraise from. So, how are they different? Which may be a good match and when?

Below is a list with the different types of investors that you could approach for your startup. Once you know who to pitch, it’s all about perfecting the pitch deck to close your round of funding.

ANGEL INVESTORS
Professional angel investors are normally approached when it comes to the seed round and beyond. They are willing to fund smaller operations than VCs, may be more flexible in terms, and can offer a lot of value in wisdom and connections.

Angel investors can be approached directly online, at live pitch events, and through introductions from other startup founders.

ANGEL GROUPS
Angel groups have been increasing. They have become more popular and more organized. These are groups of angel investors who band together to make investments in startups. This enables them to invest with more confidence, with larger check sizes, and with lower exposure to risk.

ACCELERATORS & INCUBATORS
These vehicles can ultimately be a gateway to a variety of the types of investors on this list. If accepted into one of these programs you may receive anywhere from $10,000 to $120,000 in seed money to cultivate your idea and gain traction, while benefiting from additional knowledge and resources. If everything is going well, you’ll be pitching larger investors and be introduced to funding sources during their demo days that can help take you to the next level. Just be ready to hustle, these programs want to speed you on the way to the next stage quickly.

VENTURE CAPITAL FIRMS
VCs are the holy grail of investors for fundraising entrepreneurs. They come with the biggest checks, the most power to fuel success and gaining market share, and most juice when it comes to achieving more credibility and visibility.
More venture capital firms are looking at and are participating in earlier funding rounds. Though it is much more likely these investors will show up and be secured in Series A, B and C fundraising rounds than earlier.

Do note that not all of these firms are created equal. The best match can be influenced by location, the timeline of their funds, their interest and expertise in a certain field, their power to help you get to the next stage and of course, how they treat their founders.

CORPORATE INVESTORS
Investing in startups carries a variety of benefits for big corporations. Including supporting their own growth numbers, diversifying assets, and identifying talent and technology which can help them fend off industry changes and fuel revenues and profits. Some have funds to invest in outside startups. More are launching their own accelerator and incubator programs and ecosystems for cultivating these opportunities.

These investors can be great allies in taking your business to the next level. Though they can be quite different to work with, and any integration or collaboration on sales channels, systems and customer bases needs to be approached carefully and with a lot of patience.

Founding entrepreneurs and corporate investors often have completely different styles and perspectives. It’s going to be vital to learn to understand each other and have some boundaries set up when going in, if this is going to be an enjoyable relationship.

AS YOU CAN SEE FROM THIS LIST, THERE ARE A WIDE VARIETY OF VERY DIFFERENT TYPES OF INVESTORS FOR FUNDING STARTUPS. SOME ARE VERY SPECIALIZED IN THE STAGES AND FUNDING ROUNDS THEY WILL INVEST AT. THOUGH THESE LINES ARE INCREASINGLY BLURRING. THINK OF THIS AS A LADDER, NOT AN A OR B MENU LIST.

AS YOUR STARTUP GROWS DIFFERENT SOURCES OF CAPITAL WILL BE MORE ADVANTAGEOUS AND VALUABLE TO FUELING THAT NEXT LEVEL OF GROWTH. UNDERSTANDING THESE DIFFERENCES WILL BE INVALUABLE FOR AN EFFICIENT FUNDRAISING CAMPAIGN AND TARGETING THE RIGHT INVESTORS AT EACH RAISE.

Our goal is to make applied research a profitable activity that attracts vastly more private investment than it does today so that the number of inventions generated soars.

For a confidential and complimentary initial appointment with Xegate!
CONTACT US

Language