Protecting a prototype


2

I want to develop a prototype to demonstrate to investors my idea in a practical way, hopefully securing funding to develop a full working product.

My concern (however unfounded) is how I can stop potential investors from taking my idea and running with it, without me.

I can't patent my idea as it is a particular implementation of an existing and open technology, however it differs in many ways and brings a lot of unqiue features with it, and it will be a lot of work to even implement the prototype.

No investors are going to sign an NDA and that tends to be non negotiable with them holding all the cards.

So, what protections can I take to protect my work and idea?

Investors Prototype

asked Jun 24 '11 at 01:49
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Sonny Ordell
197 points

1 Answer


2

Real investors see ideas day-in and day-out, esp. startup funders. Real investors are not in it to do it themselves; they have many more ideas than time/resources. Most investors respect the property of entrepreneurs; many are/were entrepreneurs. Most investors understand there's more to a successful startup than the idea.

This is not to say that the unthinkable can't happen to you, but get over your fear; it just doesn't happen anywhere near as often as you think.

The only real way to protect something is to patent it... and to have the cashflow to defend the patent.

An additional way is to have a strong network of support, which means investors, advisors, etc, which in turn means getting out there fast and networking your idea. It's a form of embrace-and-extend since those that could be your competitors become your investors.

Furthermore, thinking beyond launch is critical. When you launch, that's when copycats will come flocking.

answered Jun 24 '11 at 02:12
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Alphadogg
1,383 points
  • I get it happens very rarely, but in the event it does I would like to know what I could do. Would I have cause to go to court for example? – Sonny Ordell 8 years ago
  • @sonny: It does happen rarely. If it happens, it will likely be with an established competitor who has more cash-flow than you probably do. Given that, no amount of contractual obligations (confidentiality agreements, NDAs or patents) will help you when you essentially can't defend them. The only way you can mitigate the risk is to walk a fine (and experience-based) line between giving away too much and too little early on, and to run-and-gun your startup to the best of your capabilities. – Alphadogg 8 years ago
  • Also, this great quote: "Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats." -- Howard Aiken :) – Alphadogg 8 years ago

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Investors Prototype