by Infoshelter

Created on: December 07, 2010   Last Updated: January 18, 2011

Creativity is a property inherent to humans. In fact, many people have dreamt about turning an idea into a real-life project and becoming, in this way, innovators and inventors. However, imagination is one thing and realization is another. Money is what usually comes between them. Therefore, in order to develop commercially an invention, funding is of primary importance in case the inventor does not possess any form of personal equity.

At a first stage, marketing the invention by participating in commercial exhibitions held both locally and at national and international level is crucial. It is worth investing any limited, hence valuable monetary resources, in promoting the basic idea of the invention. This tactic is more possible to result in a much needed, solid investment, than trying to save money, with the intention to use it to further develop the concept in technical aspects. As in any business area and sector, marketing, promoting and selling a product, a service or an idea, is the ultimate target and it should be equally, not to say more sought after, than core production.

In essence, raising finance to bring an invention into commercial production has many similarities to the procedure that is followed when applying for any form of business finance. Viable and detailed business plans, as well as carefully-structured cash flow statements, are the foundations of the process to attract funds for an invention.  What investors need to see before approving the funding of an invention is how much profit their investment will yield, as well as how and when it will be paid back to them. They also want to rest assured that any risk of losing their money is limited to the minimum possible; they do not want to lose their capital. Therefore, an inventor should be adequately prepared to convince them by showing solid forecasts of the potential for healthy profits.

On the other hand, there are a few things to consider that are specific only to invention funding and not to general business funding. Firstly, it should be noted that there are two main types of investors when it comes to funding an invention: Venture capitalists and business angels. These two categories of funding sources are more specialized in investments such as the early steps of the development of an invention, due to the fact that they are more willing to undertake risk, than their conservative counterparts, the banking institutes are. However, they still want to know how their funds

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