Research

Do homework before approaching company to buy your idea

You have an idea that you think you could sell or license. What next? Sidnee Peck, director of the Center for Entrepreneurship, provides readers with guidance.

2014-05-05

By Sidnee Peck Director, Center for Entrepreneurship Question: I have an idea, and I think it would be attractive for a company to buy or license from me. How do I do that? Answer: An idea alone is worth nothing. Make sure you are prepared before you start setting up meetings with companies. Do you actually have something to sell? Depending on the complexity of the idea and the resources required to build it, you should have something ranging from a detailed sketch with engineering specifications to a working prototype ready for manufacturing. You also should have a patent or preliminary patent filed, if applicable. The more you have, the more power you have in the deal. Next, explore why this would be attractive to specific companies. What is in it for them? Does it enhance a current product or help them reach a new market? Does it use existing capabilities and potential open capacity? What would their margins be? Then, start using your network to get introductions and secure a meeting with a few target companies. LinkedIn is a great resource for this. This process will involve many meetings, so get ready to drink a lot of coffee and always ask for feedback. Licensing involves complicated legal agreements, so hire an attorney before any key negotiation meetings with a potential partner. First published in The Arizona Republic, May 5, 2014 http://www.azcentral.com/story/money/business/2014/05/05/homework-approaching-company-buy-idea/8744149/

Entrepreneurship Management