Sharing Your Business Idea With Investors
A lot of us are quite paranoid when it comes to sharing our business ideas with other people. This is mainly because we feel threatened that they might be stolen. While it is possible for your ideas to get stolen by those who can’t generate their own, it is no reason for you to hide yours from people who may be able to help you to turn your ideas into reality. Inadvertently, your protective actions might actually be preventing you from finding the right investor.
Now, let’s assume you only tell your family and friends about your idea. The probability of someone stealing your idea from your immediate circle is close to zero.
Assuming you pitch your idea at a conference to a bunch of investors with a lot of money, the fear here is that they have the means to easily steal and implement your idea right? No. Venture capitalists, as we have come to find, are more interested in investing their money into a founder with a brilliant idea with the ability to turn it into a profitable business than to pick up an idea and run with it themselves. Venture capitalists are in the business of investing, they are not interested in running and operating businesses themselves.
You may fear that the venture capitalist or investor can steal your idea and give it to another entrepreneur to run for them, but again, ask yourself, why would an investor go to all the trouble to steal your idea only to hold another pitching session to find another entrepreneur who would replace you and commercialise the idea? So once again, in this scenario, you are safe.
But what if they eventually do steal my idea?
Then they steal it. Stolen ideas are nothing new. However, you can turn a stolen idea into a benefit if you want to. When you eventually build a successful business, you will attract a lot of copycats and imitators. What do you do then? Having your ideas stolen this early may even grant you open access into how your future competition thinks and you can begin formulating a plan to supersede them.
You may lose the advantage of being the first to hit the market with the product, but consider the story of MySpace, Hi5 and a bunch of the other social network platforms ahead of Facebook in the day, where are they now? Success at the end of the day is not about who started first but who was most sustainable in their growth and never lost sight of the end goal.
Strategy to protect your idea
Keep in mind investors often don’t know every fine detail of your industry and product. Investors want to know what your business is, who your target customers are, what your business model is, your growth strategy, and how much money you need.
You don’t need to necessarily tell them every minor detail of your product or share sensitive data. If an investor is interested in learning more after viewing your high- level pitch, then they will ask questions to learn more. In turn, this gives you an opportunity to ask them questions and learn more about them.
The key take away is you have to share some information to get investors interested but you don’t need to put everything on the table on day one. Once you start talking to investors, you will gain experience into how much and the type of information you need to share.
In this FREE report, we reveal the best way to find investors, the best way to pitch, the funding process, and our top 10 tips for raising capital.