How to Protect Your Business Idea
If you are seeking investors for your business idea, you may be concerned about protecting that idea from theft. Most potential investors are not interested in stealing your idea, but it may be wise to take a few extra steps to secure your idea. Here are some ways you can protect your idea as you seek investors and lenders.
Research the Investor
You should spend some time evaluating each client or investor before you make a pitch. Reputable investors should have a good record with the Better Business Bureau and a history of supporting new business ventures. Researching your investor can also help you decide if that investor may not be the right fit for your idea and how you might best pitch your idea to the investors who are good matches.
Disclose Only What is Necessary
You may need to plan several versions of your pitch which only reveals the information needed by that individual. When you make an initial pitch to a future client, you should focus on the concept and not the manufacturing process. Instead of offering technical information, share how your idea can benefit consumers. Investors may require more detailed information about your product or service before agreeing to back your project.
Register a Provisional Patent
A provisional patent can protect your business idea for a year at a fraction of the cost of a regular patent. This can buy you some time as you shop your idea to clients, investors, lenders, and even possible competitors who might be able to manufacture your product. The patent may also provide documentation of your product idea even after it expires.
Apply for a Trademark
Trademarking your company name may act in lieu of a provisional patent since you will have to provide documentation about your business concept. This documentation can serve as proof that you developed the product. A trademark may also appeal to investors and lenders in terms of professionalism and dedication to your business plan.
Include a Confidentiality Agreement
Many potential investors will refuse to sign a non-disclosure agreement before hearing a pitch. However, you can include a confidentiality agreement in your initial proposal, and only require a signature if the investor wants to move forward with the idea.
Though it is unlikely your business idea will be stolen, it may be wise to be careful about your methods and process. Tailoring your proposals to each type of client or investor can be an important factor in your business plan and may show investors your attention to detail.