A business minded individual can have the perfect idea and the best plan to execute it, but neither will get that person anywhere without funding and finances. A small business or a startup can cost anywhere from $100 to tens of thousands of dollars. Some businesspersons need to use unconventional methods such as registration loans Scottsdale because they do not meet all the requirements for traditional business loans. An entrepreneur can use one or several tactics to piece together the funds to start a business.
Inventor Resource
The initial funding for independent inventions normally comes from ‘friends family and fools’, but once this is exhausted, and you need to progress to the next stage of development, you will need to find other funding.
Grants
There are a number of publicly funded grants available for innovative businesses, some of which can be applicable to inventors. There are two levels of grant suited to independent inventors, and each will require some funding commitment from the applicant, aside from the grant. ‘Micro projects’ are described as ‘simple low-cost development projects lasting no longer than 12 months’. With a maximum grant of £20,000, this is probably the most appropriate for inventors starting out with the development of a new product. ‘Research projects’, lasting 6-18 months, can receive a maximum grant of £75,000, with the aim being ‘to investigate the technical and commercial feasibility of innovative technology’. For more radical inventions, perhaps using new materials or advanced technology, or involving external partners, these are appropriate.
Loans
Do not re-mortgage your house in order to pay for your invention, no matter how brilliant it may seem. If one piece of advice comes through clearly time and time again from inventors who’ve ‘been there’, it’s this.
Small business loans are suitable, however. By presenting yourself as an entrepreneur — a businessperson looking to involve the bank in a mutually profitable relationship (even if you think of yourself as a ‘garden-shed-in-your-spare-time’ inventor) — you stand a good chance of receiving a favourable loan. If your business takes off, quite apart from the interest on the loan, the bank will want to have you as a customer, since business banking charges are a significant proportion of banks’ income.
Venture Capital
Venture capital is most often appropriate for inventors who have made significant progress with their invention and are well on the way to turning it into a successful business. In this sense it should not be seen as a first option for funding your invention. Venture capitalists, or private equity financiers, are looking to make significant returns on the money they invest — which typically belongs to others, as part of a fund — and clearly want to maximise the upside of the risk while minimising the downside.