A few of my friends and I are in the works for a social networking website like facebook.com that is geaerd towards a small local crowd. However, we have created a unique and effective method of advertising and find our system to be unique.
As we will be looking for Angel Investors, we will propose and reveal our entire site in a business proposal and was wondering what is the right process of doing this?
Should I be patenting this idea before I let the word out on everything? How much does patenting cost, and what is the turnaround for approval?
I find that we are tight on money. As we have already invested in a high grade server for our business, we may not even be able to get a patent done if the process is to costly. However, is this a necessary step or simply a recomended step?
Any links, suggestions, or feedback is extremely appreciated.
You don’t need to patent your business idea (or technology or algorithms) in order to present to VC’s or Angels. You don’t actually have to patent it at all, even once you’re ready to proceed.
A non-disclosure agreement will suffice. Here’s a link to a free NDA: www.score.org/downloads/NonDisclosureAgreement.pdf.
The patent is an ounce of protection from theft of your unique technology or business model, or your novel application of an existing technology. Many companies, i.e. Coca-Cola, forego patents altogether because the application would force them to reveal their recipe to competitors who might read their patent application. That’s only one issue with patents.
Here are a few others: They can be costly if you use a patent attorney (which most people would recommend); they can take lots of time (you have to search patent database to make sure your idea or technology or model or application thereof is actually novel; and you may find that someone has a very similar patent or application for patent in the same SIC, then you’ll have to duke it out to show that yours is novel or filed first. Finally, there are lots of scams out there trying to get you to use their services at an extravagant cost.
Here is the fee schedule for U.S. patents: http://www.uspto.gov/web/offices/ac/qs/ope/fee2006october14.htm
Okay, here’s the final bit. You didn’t ask, but I thought I’d tell you anyway. It sounds like you are at early seed stage (you have a product or at least a prototype, but you have no customers and no revenue). Seed stage funding is the most difficult to land because (1) Finding Angels can be like herding cats since they don’t all belong to these organized little Angel associations, (2) Getting in to present can be difficult because your pitch and presentation have to survive preliminary due diligence in order to present your deal in front of the larger Angel group, (3) Everybody and their brother is pitching the next YouTube, MySpace site, so it’ll be tough to stand out.
Here are a couple of links you might check out:
Keiretsu Forum (Full disclosure: I’m affiliated with this group): http://www.k4forum.com/apply/index.html
MoneyTree Report (List of VC firms, database of VC info): http://www.pwcmoneytree.com/moneytree/nav.jsp?page=firm
[you may need to register, but it’s free]
Bottom line: Skip the patent unless you have some amazing new proprietary technology that will take the Web world by storm. Go with the NDA (but don’t go overboard because some Angels will find it insulting that you’ve come asking for money but don’t trust them).
Hope this helps,
Originally posted 2015-10-02 02:15:00.