Q:

How can investors finance their inventions?

A:

Quick Answer

Inventors can finance their ideas through grants and loans, which are generally offered by relevant government agencies. Inventors may also finance inventions by finding investors.

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How can investors finance their inventions?
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Full Answer

Various branches of the government provide loans and grants to fund the development of inventions. Inventors can obtain grants for specific types of inventions through governmental programs. If an invention saves energy, for example, the inventor might qualify for grants through the U.S. Department of Energy. An inventor may also be eligible for small business loans through the U.S. Department of Small Business.

Alternatively, inventors can find an angel investor or venture capitalist to finance their invention. An angel investor is usually someone with spare funds and industry-related or personal interest, while venture capitalists, on the other hand, typically finance ideas based only on their potential to earn a profit. For both types of investments, inventors should have a solid business plan to present to potential investors. This type of financing is usually not the first stage for inventors.

Several student programs are also available to help inventors finance their inventions. Inventors can apply for scholarships or participate in student invention competitions. Canadian inventors can also seek financing through research money, support groups and government patent offices.

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