Posts Tagged: "crowdfunding"

What if your startup is a university startup based on university developed and patented technology? The goal is not only to create a domestic corporation, but also to create a local corporation that leverages university technology. Moving to China isn’t an option for a university startup, regardless of the technology and likelihood of attracting funding from venture capitalists. Fortunately it is not as difficult to find investors as you may think. Equity crowdfunding is on the path to surpass venture capital as the preferred way for startups and small businesses to raise capital. In a nutshell, equity crowdfunding is the sale of equity (or debt) in your business directly to investors using an online platform instead of a stock brokerage firm.

Once your patent has been awarded you may still need additional capital to turn that patent into a business. Fortunately it is not as difficult to find investors as you may think. Equity crowdfunding is on the path to surpass venture capital as the preferred way for start-ups and small businesses to raise capital. In a nutshell, equity crowdfunding is the sale of equity (or debt) in your business directly to investors using an online platform instead of a stock brokerage firm.  It is also less expensive than hiring one. Although direct to investor funding over the internet has been around since the late 1990s, it came of age with the JOBS Act in 2012.   

Today (TTOs) are increasingly being run by professionals who are experienced in startups, licensing, monetizing and have tremendous depth of technical knowledge in a variety of fields. But they are all waging a losing battle in an industry where 73% of the offices are losing money and an additional 16% just breakeven. It is not because of the efficiency of these offices, it is because of the underlying business model… But the impact of technology transfer on the US economy has been enormous. Since 1980 more than 5,000 startups have been created. From 1996-2013 technology transfer has contributed $518 billion on the US gross domestic product, and $1.1 trillion on the US gross industrial output.

An unfounded belief persists that entrepreneurs are the primary innovators. However, in a study of the top 30 innovations of the last 30 years up through 2009, as judged by Wharton professors, shows innovations that most affected society were conceived by company workers, not entrepreneurs, according to Dr. Kaihan Krippendorff, a Wharton alum and self-described study author… So in order to encourage innovation, these characteristics of employee-innovators should be developed early on, according to Krippendorff. Logically, not only would that increase the level of innovation but also ease the task of innovation management.

Holding a provisional patent application pending, but failing to file a nonprovisional patent application by the one year deadline, means you lose the right to that filing date, and could potentially lose ownership rights to the invention. This outcome is fine if you have done your research and determined that the invention cannot support a viable business. It’s not fine if you haven’t completed all of your research prior to the deadline. Unfortunately extensions are not possible.

Crowdfunding addresses the two biggest challenges many inventors have. “What is the market for my product?” and “How do I get initial funds to produce it?” Conventional sources of funds include yourself, “friends and family”, and angel investors. Crowdfunding adds a new source of funds, the initial consumers. Inventors get committed funds and guaranteed customers. Backers get to be the first to get an exciting new product. If the funds are raised, you know you have a market and you have the resources to produce the product. If the funds aren’t raised, you have valuable market feedback.