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How do I fund my innovation?

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You have an idea and have made a prototype, how do you get the money to take your idea to the next stage?


Katherine Bomkamp, just 19 years old and currently studying at West Virginia University in Morgantown, West Virginia, is typical of today’s bright young inventors. Her patent-pending Pain Free Socket prosthetic device has the potential to eliminate phantom limb pain in amputees.  “I will soon be launching a company based around my medical devices, although I’m looking to license the technology. I also need a manufacturing company to help produce some next-generation prototypes before we go into proof-of-concept testing,” she says.

However, raising money to fund the product’s next stage of development may well be her biggest obstacle to date. “I’m currently looking for investors. I have not applied for grants, but an advisory board/mentor team is helping me to prepare a pitch to [venture capitalists] and angel investors,” admits Bomkamp.

Making your business case

Inventing is not just about coming up with the next big thing before anyone else does. It’s also about making sure the market needs the invention and that the invention can be produced profitably. To succeed you should “understand the whole ecosystem and supply chain your invention has to operate in, and make sure you have a convincing business case for your invention,” says Ben Whitaker, CEO of UK mobile technology company, Masabi.

Pitching for finance

“For technical inventors it may come as a shock that it’s not their technology that matters the most – but it is vital that this is understood,” says Kevin Coleman of Alliantus, who gives advice to inventors and new businesses looking for funding.  Investors may not understand the technology involved in your invention, but will understand the market and numbers. According to Coleman, when inventors are pitching their inventions to potential investors they need to show expertise, confidence and trustworthiness along with familiarity with the financial environment and market opportunities. 

Before you pitch your invention to potential investors, ensure that you can answer the following types of questions: How much profit do you realistically predict? What is the predicted annual revenue for the next five years? How much of an investment is required to take the company to the next level of valuation? When do you expect the next investment round to take place?   “It is vital to explain the key assumptions behind your statements and forecasts without forgetting these have to relate to market forecasts,” says Coleman. “There is no point in forecasting 100 million in a market of 5 million. Importantly, tell the investor when and how they will get their money back.”

The Medical Device Innovation Forum will be providing further information on different ways to finance your project throughout the next few months. Be sure to check back often for the latest updates. 

16/08/2011 | Posted by Medtronic
Tags: inventions; innovation; medical devices; investors; slow hunch; potential market; venture capitalists; technical innovators; medical innovation; medical devices innovation; health innovation