Funding a new product idea

If you have a great idea for a new product launch, it's unlikely you'll be able to adequately penetrate the market without raising some capital. Capital in this case is defined as money used to fund a new invention. It will cover these costs: materials, inventor's time, obtaining a patent, hiring a lawyer, prototyping and testing the product, and manufacturing the product initially, among other items. These costs could total hundreds of thousands of dollars in some cases. That's why inventors often find investors to help fund their new products.

Most experts say you should first look to yourself, family and friends to find investors. You may offer family and friends some return on their initial investment. Many other types of investors want to see that you have invested in your own idea before they are willing to do the same. Consider asking Venture Capitalists to fund your idea: these are professional investors who fund new ideas in exchange for a stake in the company or a return on their investment.


Finally, you can approach Angel Investors. These are people--who have a fair amount of money--who like to fund new invention ideas. However, Angels are harder to find as they don't advertise themselves as such like Venture Capitalists do. In order to find the right investment strategy for your new product launch, you'll have to quite a bit of research.