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Tools Of The Trade For The Independent Inventor
HOW TO SHOOT YOURSELF IN THE FOOT -
Foolish Decisions That Guarantee Failure
Statements Sure To Turn Off Your Angel or Venture Capitalist
By Wade Van Valkenburg
1. The market for my widget is $750 million. Conservatively, we should obtain 5% of the market in a very short time.
This is an immediate turnoff. You probably don't know your market segment, and you give no indication of how you will reach this market.
2. There is nothing in the market like my widget!
You haven't assessed the consumer need that will be met by your product. How is this need currently being satisfied?
3. There is no competition.
What other methods are there for accomplishing the same objective?
4. I have not invested any of my own money in the business, but I have invested $300,000 in sweat equity.
If it isn't worth any of your money, why should I invest mine?
5. I had to buy my new car to create a good image with my customers.
I'm afraid your financial priorities are mixed up.
6. In my business plan I have programmed a modest salary of $100,000 per year for myself.
Salary should provide only a modest income that will meet necessities. Entrepreneurs must build equity in the company, not income.
7. I will not give up control of my company!
Standard answer: 40% of a million dollars is a lot more than 100% of nothing.
Wade Van Valkenburg, a patent attorney and retired physical chemist from 3M, is a Senior Fellow with the Small Company Program in the National Science Foundation-sponsored Center for Interfacial Engineering at the University of Minnesota. In addition, he is an advisor to the United Nations and still a part-time 3M employee. He is working with 30 small companies that are either members or are potential members of the Center.
Source: Inventor-Assistance Program News. No. 43 edited by Ray Watts of Ray Watts & Associates.
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