This week I share with all of you my three fool proof secrets to convincing investors to invest in your big ideas.
The book segment this week follows up those secrets with the importance of clearly communicating that big idea.
The Brain Brew Whiskey Academy this week explains how to apply my 3 secrets to your craft distillery.
The 3 Secrets to
Getting Investors to Invest in Your Idea
To create, communicate and commercialize an innovation requires lots of money. The money can come from your existing company, from outside investors or from your own savings. Note - when it’s from your own savings it’s not uncommon for that to not be fully your decision - you often have a spouse or partner who has a financial and emotional stake in you investing your money.
I’ve spent over 40 years selling companies, outside investors, family and friends on investing in ideas that I’ve created or helped create. I’ve sold multi-national corporations, small companies, non-profits and even governments on investing in my ideas.
From this I’ve learned three secrets that I believe are nearly fool proof.
- MAKE IT REAL: Step one is to make your idea real. By this I mean you MUST craft two prototypes:
Concept Prototype: This is ideally one piece of paper that presents your idea in the way you would show it to a possible customer. When you don’t have the actual innovation use illustrations to help potential investors see your idea as you envision it.
Functional Prototype: This is a works like demonstration of the “magic” that is your innovation. It doesn’t matter how ugly it is - it just needs to help potential investors see, feel and experience the WOW you envision.
- GET THE NUMBERS: If you want investors to invest you MUST have the numbers. Numbers include: 1) Customer Research on your prototypes, 2) Sales & Cost forecasts and 3) R&D, Production and Marketing investment needs. NO MATH = NO PROJECT this is what I tell inventors inside and outside of companies.
- PROTECT YOUR INVENTION: Define in writing how you can protect yourself from being copied. Investors like to “own” something - and know that no one else owns anything close to it. The easiest way to protect your invention is to file a patent. You can also use trade secrets, specialized supply chain or in some cases trademarks.
When you can make your innovation real with prototypes, share your math and your proprietary protection then you have what you need to get investors to write you a check to support your innovation. In my personal experience over the years this process works both inside corporations and with outside investors.
Do the 3 Secrets Seem Overwhelming?
They don't have to be - learn how to tackle all three during the online Innovation Engineering Fundamentals Course.
Driving Eureka! Book Excerpt
The Importance of Clearly Communicating
Your Idea in Writing
Create and Commercialize generate the most excitement when students learn about Innovation Engineering courses. However, among those who practice, Innovation Engineering Communicate is acknowledged as the most powerful way to improve their ability to create and commercialize.
Communicate skills transform “Create” idea fragments into persuasive ideas and enable “Commercialize” teams to pivot, adapt, and align on clear and focused business opportunities.
Communicate skills turn ordinary ideas into extraordinary concepts.
Communicate skills give focus to rapid “Plan, Do, Study, Act” cycles of learning.
Communicate helps you clearly articulate the Problem your innovation addresses, the Promise you are making to address the Problem, and the product/service/system Proof that makes the Promise possible. With this clarity we can then leverage stimulus mining to learn how to improve the idea. And, with our idea clearly defined on paper, we more efficiently leverage diversity and get help from others. We better “sell our idea” to ourselves, and in so doing reduce our fear. We create “pull” for our idea from customers and stakeholders. Most important of all, we help our customers understand how the idea will make a meaningful difference in their lives.
While other courses and programs teach useful methods of enhancing creativity and project management (Commercialize) we know of none that teach the Communicate skills. Without the Communicate bridge between creating and commercializing, ideas are sparked but wasted—and teams often accelerate ideas not worth working on.
All elements of Innovation Engineering are grounded in data. However, the greatest volume of data supports the Communicate course. Tens of thousands of concepts have been evaluated over the years to identify the traits that have a statistically significant impact on your odds of success. This chapter contains an overview of the findings. To learn more, see my book Meaningful Marketing (titled Jump Start Your Marketing Brain in paperback.)
Brain Brew Whisk(e)y Academy:
How to Get Investors
To get investors to support your innovation you need to do three things:
- Make it Real: Nothing is more powerful than putting a bottle on a table and offering a taste to potential investors along with a sample bottle and label. Depending on where you live this may or may not be legal to make your own whiskey. In this case, find a local craft distiller so to be able to experiment under his or her distilled spirits production license. When I started Brain Brew this is what I did. A local distillery registered my company name under his permit. I produced and sold product this way for a couple years - until we got our own DSP permit from the TTB.
- Get The Numbers: You MUST do the math.
Connect with a local craft distiller for help.
If you can’t find help then do a project with the Thoroughbred Spirits Group - they’re craft spirits experts. Scott Schiller who owns it knows more about craft distilleries than anyone - they’ve helped dozens of distilleries.
- Protect Your Innovation: This is a bit tricky. You need to have something in your product offering that is protectable. Now protection is relative to what size market you are thinking about. It can be protectable in your town, region or state. OR, if your goals are larger protectable in your country or the world. Local protection includes: product, location, brand. Broader protection requires a patent or a truly secret recipe that can’t be copied because of special raw materials or method, patents.
DO NOT - try to say that your larger protection is your “Brand” - that’s only the case after you’ve created it. To claim it at the start is just foolishness.
3/4 oz Honey Water (equal parts water and honey combined)
3/4 oz Orange Juice
2 oz Noble Oak Bourbon
Splash of Champagne
Step 1: Add first 3 ingredients and ice to a Boston Shaker and shake.
Step 2: Strain into a Champagne Coupe.
Step 3: Top with Champagne.
Step 4: Enjoy!
The Driving Eureka! Podcast
Our goal is to help you, "find, filter and fast track BIG IDEAS."
Come and join us. We will teach how to build a business or innovate in an existing organization using the Driving Eureka! book and a whole series of education programs.