While sourcing for startup funds or pitching to potential investors, i feel insecure telling investors about my idea, though i know i need to trust them but I'm afraid it might be stolen. What are the things I must do to prevent my idea from being stolen/ hijacked??
The notion that an investor can steal your idea is highly overrated.
For any startup, ; Even more than the idea. Look at Google/ Facebook/ YouTube/ Amazon / Ebay - none of these were the first in their respective industries, but executed well, innovated, kept it simple and always followed a consumer-first approach.
While you can ask investors to sign an NDA, but doing that only puts them off.
And the investors will be trusting you with their money .. backing you when your idea is unproven and success not guaranteed. So, it should be a two way street where you take the first step !
Bro go ahead with hi confidence and trust. If anyone copies, just keep in mind- the idea is your child and you can take care of it like anything. And just remember- nobody can take care of the child like parents do. Be positive and stay positive. Thats all.
If You are a confident pilot then no one can hijack your plane.
Unless you are confident about your idea, you will never feel insecure for pitching.
Yes, one can steal your idea, but cannot the ideology and methodology you worked on.
Before pitching you should have plans A,B,C etc.
Plan A : Executive summary, detail of concept in short.
Plan B : When jury and investors will cross question you about the concept, your answer should be with well worked SWOT analysis. Present your idea, but don’t disclose in deep how you will source and cater the things. Tell them the menu, not the recipe.
Make them clear what’s in your mind. Work technically on target market and current market sentiments and growth rates.
You should we very clear with the percentage of ROI to the investor for the next executive years.
One can do the copy paste and editing only on your plan, cannot work as you can.
All above from our actual experience, we just signed a restaurant startup deal.
This is our pitching success story.
Best of Luck.
This was a major concern of mine, initially, as well.
So I self-funded and only raised additional funds from friends, family and people in my immediate network to start.
Once we had an MVP, Investor Deck, some traction and some funds previously raised, we felt much more comfortable pitching strangers (ie. Investors I wasn't personally connected to in some way).
We went on to raise another $200k or so in seed capital, within 3-4 months from small scale angel investors. From there, it wasn't long before institutional investors began to show interest as well.
We've raised what we feel is needed to achieve Proof of Concept, and will wait to pitch VC's and PE firms, but we've opened some doors there as well.
So my advice would be to not keep everything so close to the chest, and to pitch investors. It's also great practice.
The only reason for investors to "steal" your idea is if they've already invested in a very similar startup and are now fishing for ideas in order to help this startup. I've never encountered this myself, only heard stories. If that is your concern, then take a look at these investors' portfolio before talking to them. If you see a similar startup there, then address this issue with the investors before talking to them. Although, the chances that you can tell them something that they don't already know are slim.
Otherwise, you really have nothing to worry about. Investors are here to invest in ideas, not to steal them.
And whatever you do, NEVER ask investors to sign an NDA, unless, of course, it is your goal to sabotage your chances of getting an investment... ever.
Here is the reality. People for the most part look for unoccupied spaces. Unless you're giving up the formulation for the cure to cancer, publicly talking your idea is your best defense against anyone getting into competition with you.
For example, how many times have has a friend or colleague told you and others about a product or service idea they have? Then someone informs them that it already exists and points them to a website of something similar to the idea they just explained. What happens is the person who had the idea gives up on it. They assume that someone has beaten them too it and has a head start so no use pursuing it. They don't want to start in an area that has existing competition. So, my advise to you is to get out there and tell the world what your doing, publicly exaggerate your position and progress. Talk confidently, Then get it done, be the first and only one to market.
Also, most venture people will not sign an NDA so there's that as well.
This is one of the most over blown concerns of folks looking for funding. Honestly, until the product is in the market and starts to gain traction, no one knows what is or is not going to succeed.
There's many examples of companies (like Google at an early stage) who had a superior product but a tough time getting funding.
This is one of the concerns of most folks looking for investors. There are many ways to go about this.
Consider pitching your ideas or preparing the business plan without revealing your trade secrets. This can be done by revealing your unique selling point ('the what') without letting the cat out of the bag by revealing the 'how' and the 'why'.
Also try to document any conversations you have with anyone about your idea. This can be done via emails, letters etc. This paper trail may be some sort of business proposal or document, which should be sent to investors to document the birth of your idea. Though this does not in itself protect your idea, it however provides evidential proof to back up a claim you might make in future in an infringement action. This can be done by sending a thank-you email and using language eliciting a response.
A Non-Disclosure Agreement or Confidentiality Agreement may be signed. However, note that most investors might not be inclined to sign an NDA when you consider that they most likely have requests from a number of business.
How great and unique is your business idea and to what length would you go to ensure its protected.
Are you willing to copyright protect your idea?
How about doing some background checks on your potential investors?
Ask a professional for advice
Follow your instincts, they matter a lot
Try raising some capital yourself (do not entirely rely on investors) etc...