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Archive for the ‘Funding’ Category

Taking Shortcuts in Order to Secure Investment Funds Is the Pursuit of Fools Gold and Insures Failure

Thursday, August 29th, 2013

by: Geoff Ficke

Just today, on a single Linked-In group I visit, I have seen at least five naked pitches seeking funding for a new consumer product, concept or invention. This occurs almost every day on these sites. The efforts are always clumsy, transparent, sophomoric, and can only lead to futility.

How do I know these attempts to secure investment funds lead to futility? Because they continue for weeks and typically become more desperate and shrill sounding. As a consultant who has worked in the Venture Capital and Investment Banking space for many years I can state with certainty that if an item or project is as good as claimed, this is not the way to excite a funding round from sophisticated, serious investors.

Social media is a wonderful new vehicle for spreading and gaining knowledge, acquaintances and opening exciting new doors but only if handled professionally. The same steps that must be accomplished when seeking funding from traditional sources must be followed in this new world unless the offer is to be dismissed as that of a carnival barker. Here are just a few tips.

  • Support the appeal for funding with a compelling set of bullet pointed factoids that reflect that you have performed essential due diligence.

This type of support is almost never on offer. Claims to wondrous product benefits are stated with no supporting research offered.

  • Offer to provide a customized Business Plan after completing a Non-Disclosure Agreement that will confirm the assumptions stated in the appeal for funding.

The shortcut most indicative of a project built on dreams and whimsy is one without a well constructed plan that demonstrates how funds will be used and the realistic return on Investment that can potentially be realized.

  • Be very careful not to scare off possible targets of opportunity with claims of scientific breakthroughs.

Just today I read an appeal for $1.5-3 million for a technology that targeted cures for numerous serious physical maladies. These maladies included the “O” word: oncology! Cancer centric treatments require hundreds of millions of dollars to pass unbelievably rigorous testing hurdles. A few million dollars would not buy enough Bunsen burners to start a project.

  • Research and create a customized Marketing Strategy and Sales Model that will support the assumptions needed to interest funding sources in investing in the project.

A perceived good consumer product idea is of no use unless there is a strategy in place to fully commercialize the good or service in the frenetic retail marketplace. This kind of professional service is readily available from consultants, universities and local government agencies. What is the Unique Selling Proposition that separates the item from competition? Who is the competition? What is the needed profit margin necessary to prosper in the space? These and dozens of other questions and issues will ultimately need to be addressed.

  • In order to raise awareness and interest from serious funding sources have perfected prototypes, manufacturing sources, logistics, dead net landed cost of goods per mass production of the item and pricing models available.

Many of the requests I review in social media have one or several of these steps nailed down. However, almost never do they have the full flotilla that would indicate that the prospective entrepreneur is serious and viable. This is a shortcut that we see in every form of funding request that we review.

  • The hardest money to raise, in social media, cloud investing or traditional Venture Capital is small amount requests.

Investors, whether individual or sophisticated groups, like to see sweat equity from entrepreneurs and this includes that they have money on the table. Small requests for $10,000 or $25,000 are referred to as 3-F money. These are funds that come from friends, family or fools. Typically this level of funding is much too small to be of interest to traditional sources of Venture Capital.

There are a near endless number of deals and projects seeking a finite amount of capital. If you seriously believe your project deserves consideration for funding then fully demonstrate your passion. Do not take shortcuts. If you do you simply obviate yourself and your project from any possibility of success.

Entrepreneurs Should Realize There Are Absolutes in Life Other Than Death and Taxes

Wednesday, August 21st, 2013

by: Geoff Ficke

The great Founding Father, Diplomat, Scientist, Inventor and Writer Ben Franklin once so presciently said, “In this world nothing can be said to be certain beside death and taxes”. This most famous bromide has been restated endlessly in every possible venue since the great man first uttered the phrase. It is an absolute of the human condition that is so obvious as to seem almost trite.

I used to utilize the quote myself. As my life, experiences and career has entered their fourth quarter, however, I have expanded on the phrase and the paramount certitude of death and taxes in our lives. Several additional phrases that I have regularly encountered have brought me to doubt their veracity and the trustworthiness of those utilizing the lugubrious language contained therein.

The first is “I am an honest man”. Whenever I hear those five words I put my hand on my wallet. An honest person would never have to state these words in order to confirm their honesty.

Next is when adults imply “It’s for the kids”. Virtually never have I ever heard adults beatifically working for the kids unless there is some benefit involved that enhances their position. Think teachers unions. Think government programs. Think foster parent programs that have become income subsidies. There are certainly adults who rejoice at the opportunity to volunteer, mentor and work with kids. Wonderful people all. However, they usually do not self-promote and seek funds that are really for them and not so much “for the kids”.

Finally, I run when I hear the phrase “it’s not about the money”. I hear this one a lot in my work. When I hear these words, it is in actuality almost always about the money. And if it is not it usually should be.

I am a serial entrepreneur. For many years I have helped inventors, entrepreneurs, small businesses and licensors fund, market and develop a wide array of consumer products. I am always amazed when a prospective entrepreneur states that they are not seeking to profit from their idea but want to help society, employee their neighbors, aid their community  or some other vanity they prefer to the pursuit of commercial success.

Do not get me wrong these are admirable sentiments. But only after success is achieved, profits made and growth occurs. Then the opportunity to dispose of the fruits of one’s labor is an option that can bring wonderful personal and societal rewards.

John D. Rockefeller, Henry Ford, Howard Hughes, Thomas Pew and John T. MacArthur are famous examples of successful industrialists that have been dead for decades. While alive they created vast wealth by driving thriving business empires that employed thousands of people. Their companies prosper to this day. And though long
deceased, their charitable foundations perform inspiring good works in many fields of endeavor such as museums, medical research, cultural entertainment and caring for the less fortunate. Without profit, money, none of these benefits would still be happening today.

I am amazed when a person seeks funding for a project that includes a statement of disinterest in a profit motive. Venture Capital is in the business of profit. The realistic potential for Return on Investment is the tent pole upon which projects are seeded and nurtured to fruition.

Most projects that we review make unrealistic revenue and profit projections on the high side. However, not a small minority seek a funding round with the upfront proposition that the project is about some form of social activism, not the earning of profits. There are other avenues that social entrepreneurs can follow to realize these dreams. But if it’s “not about the money” it is not likely to achieve success.

Geoff Ficke to Be Interviewed on WEGP 1390 AM Radio It’s Your Life Show on June 11th, at 11:00 AM ET

Monday, May 7th, 2012

Duquesa Marketing

www.duquesamarketing.com

Press Release

For Immediate Release

Contact: Geoff Ficke

859-567-1609
gficke@msn.com

Geoff Ficke to Be Interviewed on WEGP 1390 AM Radio It’s Your Life Show on June 11th, at 11:00 AM ET

Duquesa Marketing Founder and Expert to Discuss the Most Useful Technique for Funding a Business Startup is Bootstrapping

Florence, KY  Nancy Ficke, General Manager, announced today that her Branding and Product Development firm Duquesa Marketing has scheduled another in a series of national radio interviews for Company President and Founder Geoff Ficke.

“Geoff Ficke will appear on WEGP 1390 AM radio It’s Your Life Show with Host Tami Kilcollins June 11th at 11:00 AM Eastern time”, said Mrs Ficke. “The discussion will be about the opportunity for entrepreneurs, inventors or small businesses to Bootstrap their new enterprises”.

“We work with hundreds of inventors, small and micro-businesses and entrepreneurs every year”, said Nancy Ficke. For many of these aspiring business owners their primary concern is the funding requirements they believe will be required to enable execution of a proper launch. Many assume they need to raise funding from angel investors, venture capital or banking sources. Very few will succeed by taking this path. There are many options but the simplest, and oldest is the concept of “Bootstrapping”.

Duquesa Marketing has assisted numerous individuals and enterprises start and expand Consumer Product opportunities over the past four decades. The award winning firm has vast experience in all Sales and distribution channels in the United States and internationally.

 

Sourcing and Defining Volume Pricing Is an Absolute Must for Aspiring Consumer Product Entrepreneurs

Thursday, April 26th, 2012

by: Geoff Ficke

Sourcing and Defining Volume Pricing Is an Absolute Must for Aspiring Consumer Product Entrepreneurs

I have been mentoring a young female entrepreneur for several months. She is not a client of my Consumer Product Branding and Marketing Consulting firm. This earnest lady has a very interesting concept in the Infant and Juvenile product space. Like so many aspiring first time business owners she is confused about how to best organize her enterprise and move from a hobby project to a fully commercial model.

As we discuss her projects status she states that her cost of goods is too high. This is because she is producing in very low volumes and utilizing domestic manufacturing sources. The test marketing and focus groups she has conducted are thus flawed. In order to gain proper due diligence from which to construct an accurate Sales Model, entrepreneurs must be able to ascertain an absolutely tight Cost of Goods.

Short run, hobby business-like volumes represent a distortion of the Sales Model. Unless the entrepreneur wishes to operate a low volume artisanal business it is vitally important to find the best sources of supply and manufacturing and to develop the accurate cost of mass production in hand with the chosen supplier.

We ask our sources of supply for dead-net Cost of Goods pricing for production runs that would approximate mass market distribution models. Dead-net Cost of Goods includes the total amount charged to fully assemble and package an item, plus international freight, customs, duties (if any) and local freight to a Fulfillment center.

The young lady I am mentoring has made the very common mistake of utilizing the much higher Cost of Goods she is currently absorbing based on low volume production and trying to force her Infant travel accessory items to market at a price point that is not viable. Test markets are only useful if the data received is based on solid Marketing fundamentals. Most test markets are not conducted with a goal of making profit. They are laboratories to learn about consumer acceptance, pricing objections, Branding effectiveness, etc. Test marketing saves time, money and mistakes when a product is finally launched after alterations to Marketing Strategies are made.

Take a simple component such as a 12 ounce plastic food bottle. The purchase of a stock Boston Round bottle in quantities of one hundred for testing might be $.25. In purchase volumes of 25,000 the price may drop to $.15 per unit. This type of differential, when applied to every component listed on a Consumer Product’s Bill of Materials will reflect a huge pricing differential. This has a massive effect on the ultimate optimal retail price that consumers will pay for the product.

One of the reasons usually stated for not obtaining a mass production Cost of Goods is a lack of knowledge. The entrepreneur does not know of specific factories or sources of supplies. The internet, social media and business directories today make this work so much easier than when I started my first business 36 years ago. The information and networks exist that actually make this process straightforward today.

Unless pricing for a full channel of distribution is not gleaned none of the assumptions that are used to create a business model will hold up. Sales projections, Business Plan elements, procuring investment from Venture capital sources,  Marketing Strategies and many more enterprise building blocks will crumble. Take the time and expend the energy to diligently uncover the most accurate Cost of Goods for your products.

Duquesa Marketing Announces Free Project Review And Funding Viability Analysis for Beauty Products

Thursday, April 26th, 2012

Duquesa Marketing

www.duquesamarketing.com

Press Release

For Immediate Release

Contact: Geoff Ficke

859-567-1609

gficke@msn.com

Duquesa Marketing Announces Free Project Review And Funding Viability Analysis for Beauty Products

Award Winning Branding and Consumer Product Development Firm Offers Clients Over 40 Years Experience as Project Managers

Florence, KY  Geoff Ficke, President of award winning international Branding and Consumer Product Development firm Duquesa Marketing announced today a new Funding
Viability
and Project Review Analysis for innovators seeking experienced guidance before entering the Cosmetic, Fragrance and Beauty product industry with new concepts.

“We have launched many of our own Beauty products over the last 40 years, and many more for clients in the American and international markets”, said Mr. Ficke. “The opportunity for us to save entrepreneurs time, money and mistakes by offering a simple review and analysis proves very beneficial to first time Cosmetic industry marketers”.

“A free 20 question quiz that can be downloaded from our web-site www.DuquesaMarketing.com and a phone consultation provides anyone interested in entering the Cosmetic world with a basket full of answers and options”, said Alexis Bruning, V.P. of New Product Development for Duquesa Marketing. “It is gratifying to us to be able to offer product development, marketing and funding guidance based on our long industry experience”.

“Duquesa Marketing has made it our mission to mentor young innovators in the Cosmetic industry space”, said Nancy Ficke, General Manager for Duquesa Marketing. “The menu of services we offer is a one-stop, turn-key project development service and it often starts with the Free Project Review and Funding Analysis consultation”.

The Most Under-Utilized Resource Entrepreneurs Neglect to Take Advantage of Is Local Universities

Wednesday, December 28th, 2011

by: Geoff Ficke

The Most Under-Utilized Resource Entrepreneurs Neglect to Take Advantage of Is Local Universities 

Inventors, Entrepreneurs, Artisans and Small Businesses are very often bereft of funds needed to secure professional help that would be beneficial in leveraging their projects to success. Lawyers, Engineers, Graphic Artists, Logistics Specialists, Packaging Designers, Web-site Masters, Marketing Consultants and many other qualified experts are much needed but difficult to afford for those starting a new enterprise. This is understandable but there are other sources for obtaining qualified help. 

We refer many under-funded prospective Entrepreneur’s to the nearest major University. Colleges are places of learning, often fully funded by taxpayers. There are many areas of study in each university’s core curriculum. Business schools, Design colleges, art programs, marketing majors, Engineering departments, etc. house a motivated, ambitious horde of students seeking to gain practical experience in their field of study. 

College Deans and Professors are often a wonderful source of inspiration when approached by small businesses and inventors seeking guidance. They will often assign a student, or team of students to assist on a project. Not only is this resume building experience invaluable for the undergraduate but it often leads to internships or post-graduate employment for those who successfully complete the assigned project. 

Many Universities have become very active in a commercialization process that they call “Technology Transfer”. When a school discovers a new technology, product or science that can be perfected in their facilities, they are being very aggressive in commercializing the process and attempting to create recurring income streams. We are currently involved with several major Universities in this type of product development and the concept is growing rapidly as colleges seek to leverage the invaluable resources that are housed in their intellectual property facilities. Technology Transfer can work for many more inventors. 

One of the fastest growing areas of study in Business Schools is Entrepreneurship. I have been a mentor, lecturer and Fellow at several colleges in this program. At some schools the course in Entrepreneurial Studies has become a capstone course, essential to complete before becoming eligible for receipt of a degree. These courses are often available as laboratories for inventors and small businesses wishing to perfect a Business Plan, create a Sales Model, customize a Marketing Strategy or design a Production Quality Prototype.   

These courses can be very useful. They are free for those willing to pursue the assets they can offer. Actually, most Professors love to match students with real world projects as opposed to an abstract fantasy project that the student designs on their own. 

On any number of occasions my Consumer Product Development and Marketing Consulting firm has mated entrepreneurial projects with students eager to obtain real world experience. We have done this with Gourmet Food (Nutrition Science), Footwear (Fashion Design), Skin Care and Aromatherapy (Marketing and Chemistry), DIY Product (Engineering), Packaging (Graphic Arts) and more. 

Obviously, it is preferable to utilize the most qualified, experienced talent available if it can be afforded. Students do not have an extensive body of work that can be tapped to quickly solve problems. However, what they lack in experience, they can make up for in energy and hunger. 

The job of a professional consultant or service provider is to save the client time, money and mistakes. If the client has limited monies available pursuit of assistance from a motivated student can provide a reasonable alternative. Many Small Business people often root for the local schools sports teams. It can be much more satisfying to use the college academic departments as part of your own team.

What Is 3-F Funding and Why Do Entrepreneurs Need to Understand the Vetting Process for Securing Funding?

Wednesday, December 28th, 2011

by: Geoff Ficke

What Is 3-F Funding and Why Do Entrepreneurs Need to Understand the Vetting Process for Securing Funding? 

Many years ago, when I was a young, ambitious, aspiring entrepreneur I was imbued with the conceit that venture capitalists, investment banks or angel investors would fall over themselves to invest in my first project. I was passionate about my product. I quickly discovered that investors were decidedly not.  

Though disappointed at my lack of success in securing the sought after funding, I was able to learn a lesson that has been a truism in my entrepreneurial career, and one I share frequently with prospective clients in my Consumer Product Branding, Product Development, Marketing and Funding Consulting group. Simply stated the lesson is this: Start-up funding for almost all enterprises is 3-F funding. It comes from Friends, Family or Fools. 

I am approached almost daily by aspiring Inventors and Entrepreneurs seeking a funding round for their proposed new project. They ask and I respond that this type of funding, and in the relatively small amounts requested, comes from Friends, Family or Fools. This adage is to Venture Capital as “Going, Going, Gone” is to baseball or “Hooah” is the 82nd Airborne Dvision. 

Most start-up business opportunities do not qualify for an initial investment round because they cannot stand the vetting process applied by sophisticated investors. There are many reasons for this barrier to entry. The amount that can be justified by the Business Plan is too small for consideration. The plan itself is not compelling. The inventor or entrepreneur is not compelling owing to their background or history. There is a lack of due diligence that is easily recognized in the strategy proposed. 

I regularly find myself counseling prospective small business owners that if failure to secure a funding round will kill their project, then the project probably should die. It is the successful entrepreneur’s responsibility to find a way to overcome every obstacle placed in their path, including raising seed money from unorthodox sources. If this roadblock proves fatal, then the owner is not driven, passionate, creative or clever enough to succeed in the endeavor. 

Are their funding alternatives? Yes. Many projects can be bootstrapped utilizing very limited funds and a great deal of leverage. Strategic alliances can be developed for many projects. Many projects are proposed on large scale launch and distribution strategies that can be downsized, localized and then regionalized as sales traction occurs. Money is always available for funding projects that demonstrate sales traction, and, most crucially, re-orders! Receivable funding and factoring are methods we utilize often to finance client growth.

Recently I consulted with a young man who was developing a juvenile Toy product line. He presented me with a plan that was built on a $750,000 funding requirement. As I vetted his Business Plan assumptions, I deduced, and he agreed, that he really needed about $100,000 to develop, Brand and Pre-Sell the line. I laid out a Gantt Chart for the project and detailed how this could happen and options for funding, after he had received orders from retailers. He had never considered Pre-Selling. We always consider a Pre-Sell strategy for new product launches

The $100,000 stumped my Toy entrepreneur. He did not want to ask Friends or Family for support. This is understandable. He did not want to take equity out of his home, also understandable. He wanted me to reach out to my investment sources. I replied, “Why would a stranger invest in the product if you are not willing to invest in yourself, and Family or Friends do not believe in the Toys and you”? I received no response.

 Starting a business or launching a new product or service has never been easy. It is not meant to be. The successful entrepreneur is a valued minority. Most prospective entrepreneurs do not have the ability to overcome obstacles that the markets place in the way of their progress. This culling of the herd, or “Survival of the Fittest”, is the reason that so many people want to operate a small business but so few actually accomplish the feat. Funding, or lack thereof, is the canard that most failed entrepreneurs posit as the reason they are held back. Sourcing seed money from Friends, Family or Fools must be considered as the “alpha” resource to go to first.

Before Asking Others to Invest in Your Project Prepare to Answer the Question That Always Comes

Thursday, July 14th, 2011

by: Geoff Ficke

Before Asking Others to Invest in Your Project Prepare to Answer the Question That Always Comes 

Recently I reviewed a Business Plan that was submitted with a goal of raising a $2 million angel funding round. The product was a Hair Care Accessory that had real commercial potential. If I were grading the plan in one of my classes I would have given it a solid B. I was smitten with most of the assumptions that the document detailed to support the projects viability, except one. 

There was only one very major red flag that any Venture Capital investor would seize upon and consider a disqualifier; the $2 million angel funding round. The question that is always asked when a prospective Entrepreneur presents to Venture Capitalists (VC) is this: “How much have you invested of your personal capital into this project”. In some way, shape or form this question always pops up. It is usually not well answered. 

In this case the Inventor wanted the $2 million for salaries, a manufacturing facility, travel, staff and offices as well as for inventory build and Marketing. My job is to prepare Entrepreneurs for the rigid cross-examination they will surely receive from the VC panel that examines investment opportunity. I quickly had to refocus my prospective client that funding sources want to know what you are going to do with their money, as well as what you are not going to do with it. Building fixed overhead falls into the category of what you are not going to do with investment monies. 

Ask yourself, “Would you invest in you”? If you will not invest monies and assets that you own in your project why would anyone else. For decades banks required a significant down payment before loaning money to buy a house. Housing was considered a great investment for those who had equity in the property. About 20 years ago underwriting standards were loosened and today we see what having no skin in the game has done to housing and the economy. 

We approach Venture Capital Companies to get projects off the ground. They are in business to discover exciting ideas and products that may potentially become great Companies. They have capital to invest precisely because they are smart people. The pool of hopefuls seeking funding is much greater than the available funding sources. VC is highly selective because they can afford to be.

When an Entrepreneur approaches investment sources they must anticipate and have answers for an array of questions they will surely be confronted with. If you live in a fine home, drive a new car, wear a designer watch and belong to a nice country club the VC’s I know will ask, “Why are you asking us for money”? 

In the instance of my Hair Care Accessory inventor he could not answer this question. I repeated, “Would you invest in you”? He said, “of course I would”. My response was why haven’t you? 

It is not necessary to be living in penury when asking for an investment. It is important that you can demonstrate that you have fully committed yourself to the project in question. You must be able to demonstrate that “You have invested in you”, to the best of your financial ability. Sweat equity is important. Do not take shortcuts. Due diligence must be thorough. How will you Market the project? Only when you can convince others that you are worth their investment will funding sources begin to open to your project.

How Modern Banking Is Inter-twined With an Ancient Military Order

Tuesday, September 8th, 2009

by: Geoff Ficke

The world is currently fixated on the international credit crisis and the role banking has played in this debacle. We take it for granted that commerce flows quickly and accurately across borders and frontiers. A resident of Maine can purchase a tank of gas at home, or in Italy with the same credit card. The purchase will be accurately debited to their account, their credit limit will be adjusted and the merchant will receive an electronic transfer of the charge into their account almost simultaneously. This type of commerce happens many millions of times each day and we take its simplicity for granted.

The history of the rise of organized banking is a bit more plodding and evolves from a most unlikely source. Today our knowledge of the Knights Templar is garnered mostly from popular culture such as the Indiana Jones movies. The history of this iconic fighting force, and their evolution into the first international commercial group of the middle ages is as amazing a tale as can be told in any fictional movie or novel.

The Knights Templar was formed after the initial Christian victory in the First Crusade to take Jerusalem from the Muslims in 1099. Pilgrims from all over the Christian world wanted to make the pilgrimage to Jerusalem and the Holy Land. However, travel at that time was exceedingly dangerous. The Knights Templar was first organized as a monastic order to protect the pilgrims as they traveled. They took a strict vow of poverty.

Over the next 200 years the order flourished and developed into a renowned fighting force. With their sturdy mounts, white hooded tunics displaying the Red Cross, and shiny armor, they lead the way into numerous battles against the enemies of Christendom. The vow of poverty was strictly enforced, but many royal and noble families delivered their sons to the Knights Templar to curry favor with the Papacy of the Catholic Church.

The Knights Templar enjoyed favored status with popes and archbishops from all over Europe and North Africa, for their reverence, gallantry and honesty. They were often rewarded with alms, farms, lands and livestock. Their power grew as the public recognized the special relationship they enjoyed with the clerical hierarchy of the Church.

Many pilgrimage makers came to depend on the Knights Templar to hold their valuables in safekeeping as they made the difficult journey. The order created secure safe storage facilities at strategic locations along the most used routes. They developed a type of written chit that verified that they held certain monies and valuables owned by the bearer. Upon arrival in the Holy Land, the bearer could visit a Knights Templar outpost, present their receipt and receive monies, bullion or goods in kind, the equivalent of that left behind in the order’s care.

This was the first form of bank cheque and was probably the earliest form of organized international banking. The system evolved as the Knights Templar gained vast new riches, even though they were still vowing to live a life of poverty. Previous to their development of rudimentary banking products most trade was accomplished by crude barter. They became the richest entity in the world at that time and began to suffer the increased scrutiny of their historic protectors in the Catholic Church.

By the 14th century, the church moved to disband the Knights Templar and martyred many that were captured. The order became a secretive underground society and rumors of their activities and continued existence are legend to this day. The locations of the lost gold, silver, jewels, art and religious artifacts that the Knights Templar acquired and hoarded in their many adventures is also the stuff of fables and lore. The lost Holy Grail, and all of the fabulous tales attached to this famed relic from the Last Supper, is often connected to the Knights Templar.

The commercial activity that the simple, novel creation of a system for verifying bank guarantees is actually the Knights Templar’s greatest contribution to mankind. This simple transactional device has proven far more valuable historically than their military conquests and reputation for living pious lives. It is certainly not what they are best known for. But it is an invention that has positively effected commerce and productivity to this very day.

Strategic Alliance The Underused Option

Monday, August 24th, 2009

by: Geoff Ficke

You are an entrepreneurial inventor with marvelous ideas in your area of expertise. The ability to create models, prototypes and concepts flows easily from your fertile brain. Nevertheless, all you have to show for your creative efforts is a garage full of dead end stuff, despite all of your efforts.

Many creative people have an area of knowledge in which they excel. They are in their comfort zone there and can appear to be a master of this precise universe. However, taken just a bit outside the protective lines of this tight little planet, they are lost souls. They can not communicate their brilliance, demonstrate their value and commercialize their creativity.

This is all too often a loss for the economy and society at large. A great invention that does not arrive in a timely fashion to the marketplace is a huge loss on many levels. Innovation is the juice of life for a vibrant economy. To be deprived of any source of ingenuity, no matter the reason, is to limit the range of possibility so vital for discovering big, new ideas.

A relatively little used option, for inventors and entrepreneurs, with limited ability to fund or license their product, is the Strategic Alliance. A Strategic Alliance enables a product, invention or service to become absorbed within the structure of a going business. The business handles all aspects of production, sales, marketing and finance as if the item was invented in house. In return, the inventor receives an income stream for a defined share of the profits generated by the product, a consulting agreement or employment working in his area of expertise on the project.

Many successful Strategic Alliances occur when an inventor, recognizing his areas of weakness, is knowledgeable about industry conditions, patterns and networks within this universe. Software writers, engineers, chemists and technicians often utilize this narrow gauge form of networking. It is a strategy available to any inventor having specific industry experience with application to their novel product.

The Strategic Alliance approach minimizes the need to approach strangers from outside your area of expertise. You know your field, you know the players (good and bad), you know the industry trends and you, better than anyone, know the innovations craved within this area of business. Familiarity with these factors gives the creative mind a leg up in pursuing an alliance that will enable a successful commercialization of their invention. Many people are immensely more confident when speaking the language of their trade than communicating in any other arena. Take advantage of this inside baseball edge!

The successful Strategic Alliance usually occurs much quicker than funding or licensing. The parties to the alliance, typically coming from the same business category, communicate in terms that are direct, and short circuit the usual learning curve required when negotiating with outside, less than knowledgeable investors or bankers.

An added benefit to the partners is the minimization of investment funds required to ramp up a new project. The business side of the alliance usually has specific experience in the product category. Most, or all, of the infrastructure needed for successfully marketing the invention is already in-house. From secretarial help, to warehousing, to manufacture, to finance, this is a going business with a complete set of assets. The lead-time from agreement to actual shipment of the item is often greatly reduced.

Strategic Alliance can be a win/win for both parties, and in my experience is usually the result offering the best outcome for the acquirer of rights and the inventor when they come from the same business category. The shoe fits well here for both parties.

It is important for the creative, but inexperienced, inventor to seek professional assistance when negotiating terms and conditions of the Strategic Alliance Agreement. The excitement of making a deal, and working with people from within their specific industry, should not get in the way of prudence. Contracts are often complex, and it is important to circumvent disagreements later, so clearly define each parties full range of obligations and conveyance.