When and with Whom is it safe to discuss innovative business plans?

Discussion in 'Starting a Business' started by PrismaticAegis, Feb 28, 2016.

  1. PrismaticAegis

    PrismaticAegis
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    Hi,

    I have a theoretical business model that I would like to develop into a sole proprietorship. It would require significant capital investment, as it would be most effective started on a national stage with a significant advertising campaign and a number of networked offices in major metropolitan areas. It would also require certain specialized skillsets that I do not currently have, such as web design, web security, and database management, which makes it challenging to anticipate the complexities that would emerge at the core of a very tech-centric operation. However, I am absolutely convinced of the feasibility of the business plan, as it meets an important need, and all its components have been demonstrated workable by one or another successful contemporary business(es).

    Please advise me as to what footwork or precautions I should take before speaking with others about the specifics of this idea. For example, should I talk to a patent lawyer about the possibility of a utility patent? If so, how complete should my business model be (ie, should I know all the web security protocols I will implement, or all the tech specialists I will need to hire) before I contact a lawyer or law firm? And at what point can I feel safe presenting the idea to banks or other investors?

    Knowledgeable input greatly appreciated... :D
     
  2. hanerykroze

    hanerykroze
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    It is better to discuss the business innovative with the family members because they will always suggest the better advise for your success.
     
  3. CWPDEV

    CWPDEV
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    Generally, I subscribe to the idea that people are, if anything, far too cautious about discussing their plans for fear of the idea that someone will steal it. This typically seems to come from anecdotal stories about that one guy a friend know who lost his million dollar idea when he told someone.

    I don't subscribe to this, and cautious measures-- patents, etc. will only slow you down when you should be moving ahead with your great idea.


    Venture captialists and investors won't attempt to steal your idea, they'd never get another opportunity if they did. Other businesses that you talk with generally won't be interested in stealing your idea, as a business partner is more profitable than a stolen idea.

    My vote: Press ahead and worry about how to protect you IP when you've reached critical mass. I'll leave you with a quote (I think it came out of a McDonald's President) "We can innovate faster than they can duplicate."
     
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  4. Gerry Speck

    Gerry Speck
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    First Congrats for your business. I would like to recommend you to share your business idea with your family, or friends or any other person which you are thinking more trustworthy. If you have a new business idea and if someone use the same concept, then whole work can be wasted.
     
  5. anna c

    anna c
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    If you do not have the required skill set, then it is possible that there are areas of your business idea that you may be overlooking. I think it is good if you could discuss your idea with just anyone - your family, people who you think may have knowledge about the industry, entrepreneurs, your friends. I mean no disrespect when I say that the possibility of someone stealing and executing your idea is low compared to the possibility of you benefiting from actionable insights and good advice. Wishing you the best of luck!
     
  6. anna c

    anna c
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    Great point! I have similar views. The value of a business idea is in the execution - the final product. Getting good counsel and advice can be instrumental in helping one execute better and faster.
     
  7. PrismaticAegis

    PrismaticAegis
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    Thank you all very much for your insights, they have given me a lot to consider, and I am sure they will also be of interest to people in similar situations who read this thread now and in the future.

    I am currently in the process of writing up my business plan while researching areas of business and technology which I feel I still need to understand on a more profound or systematic level. The idea and the path forward have clarified and evolved a fair bit with the acquisition of knowledge and the passage of time. I would mention my ideas to family and friends if I thought it worthwhile, but honestly, based on previous conversations, I think I am the only person in my social circle who understands business at all... at its core, the idea is sensitive and high-level enough that the only people I really trust for advice on the specifics of implementation are the very same people from whom I will be soliciting funding!

    FYI, something else I now appreciate is that the price of soliciting funding from the ideal investors (certain elite venture capital firms) will probably be to dilute my overall stake in the company - I guess a sole proprietorship (like I thought I wanted) is more realistic if your business model works as a small, traditonally-funded operation!

    Personally, the solution to my concern I think will be: to limit the investors I speak with to a selective few; to begin negotiations simply by presenting an executive summary of my idea that mentions only the size of the projected market, the estimated cost, and the expected profitability of the venture; and to follow-up with a carefully-worded non-disclosure agreement that would hold liable for the lost value of the business anyone who communicated any element of the idea to anyone outside of our meeting...

    https://en.wikipedia.org/wiki/Non-disclosure_agreement
    http://www.ndasforfree.com/index.html
     
    #7 PrismaticAegis, Apr 12, 2016
    Last edited: Apr 12, 2016
  8. Business Attorney

    Business Attorney
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    There is nothing wrong with asking for a non-disclosure agreement in most cases. Many professional investors will refuse to sign them, though. They look at so many business plans that the ideas often overlap. Signing an NDA could unduly restrict their ability to continue to review deals, or at least subject them to potential litigation.

    I mostly agree with CWPDEV and anna c. Far too much emphasis is put on secrecy when ideas are a dime a dozen. Very few ideas are truly revolutionary. Google, Facebook and Microsoft were all built on basic ideas that were already in the marketplace when they were formed. They just did it a little better. The ability to implement the business plan is the key.

    Also, sharing ideas is a great way to get feedback to refine and improve your ideas. The fewer people who hear your idea, the less input you get.

    Of course that doesn't mean you should plaster your idea all over the internet or even share it with someone who is in a good position to implement it faster or better than you. Sharing it with people you trust and whose insight you would value should not be a major concern.
     
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  9. Universitiutara

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    i agree with henrykroze. i think you should do share your idea with your family member and friends. yo can also discuss with business planner or advisor.
     
  10. HenrySimons

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    If you're really worried, or feeling uncomfortable about discussing your idea I'd recommend drawing up an NDA, non disclosure agreement, I've had to sign a few of these before and have found they are quite common - never an issue to sign as I'd never steal someone's idea, so if someone did have an issue signing it probably a good sign that they are not worthy of hearing your idea. Hope this helps
     
  11. Micheal Anderson

    Micheal Anderson
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    Yes, It's better thing you discuss your business plan with your family because they have own their experience to share with you and maybe you got many points for your business plan.
     
  12. Clinton

    Clinton
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    I agree with previous posters. You're grossly over-estimating the value of your idea.

    By your own admission it will take a lot of capital to achieve this. Further, it appears it also needs considerable business savvy what with all these networked offices and national level marketing campaigns. Can you prove that savvy?

    I fear if you do not already have some reputation in the industry and / or success in business yourself you'll find you lack the personal credibility you need to raise capital from VCs for a project of this nature.

    VCs are no pushover. From the language you've been using I suspect you'll have trouble getting funding.
    - You don't go to "elite VCs". You go to the ones in the industry who'll be willing to give you 60 seconds for your elevator. Or beg them to give you 60.
    - You don't talk about "projected market", "expected profitability" etc. That's hot air - VCs are sick to death of it. Talk about how YOU will build, how YOU will scale, what milestones YOU will hit and what money and commitment YOU will be putting in.
    - You certainly don't tell them you'll hold them financially responsible under the NDA for any leak. They'll think you are barking mad. No VC will sign that.
    - You need to appreciate VCs aren't desperate to invest in your business. They have a million businesses like yours trying to get their attention. You are the pawn, it's not the other way around.
     

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