The Perfect Pitch: How Much Should You Reveal?
It can be tricky to know exactly how much to reveal about your business when attempting to make the perfect pitch. If you are pitching in a public forum, should you risk divulging your original ideas? Is the exposure and possible investment funding worth the risks?
A potential investor or client is unlikely to be willing to work with you unless you disclose information about your business. However, you need to find the right balance between disclosure and confidentiality in order to protect your intellectual property.
Protecting your names
You should consider protecting the name you want to use for new products and services you will be discussing before pitching to anyone. If you have not already protected the name you are putting yourself at risk; names are not protected by copyright meaning that a member of your audience could easily secure the name as a trade mark and gain the benefit of all the brand investment you have made and publicity you generate. If this should happen, your idea becomes a non-starter.
Accordingly, you should always take professional advice on names as there are many pitfalls for the unwary. If the name you are using is not legally effective, and suitable for your business, you might waste your resources in applying to protect your name yourself.
In situations where a non-disclosure agreement (NDA) can be used, you might think that is a solution to the problem. However, in practice it is unlikely that potential investors would be willing to sign NDAs. It is more to your advantage that they hear what you have to say than it is to theirs to listen to you. Statistically there are a lot more entrepreneurs looking for investment than there are investors. Moreover, while NDAs provide you with some contractual protection you should not depend on them.
Ideas versus implementation
If you have an idea which the other party you are pitching to could implement better than you – such as the situation that arose for the Winklevoss twins who shared their concept for Facebook with Mark Zuckerburg – then avoid going to them for investment if you have a potentially lucrative idea. If it is essential that you communicate the information to a third party without the benefit of an NDA in order to progress it, you should only reveal the broad idea without going into too much detail.
It is vital to be mindful of your business before divulging information. With some ideas you simply should not discuss them without an NDA in place if loss of confidentiality would lose you the opportunity to patent the concept (see our confidentiality services page for more information). For some product-based inventions, such as Dyson’s bagless vacuum hoover, your business is unlikely to succeed without patenting the innovation before going to market.
Patent pending status
In practice, it is a mistake to go to an investor without having first applied for patent protection. Once you have a patent pending, you are more likely to attract and secure funding because the investor expects you to have protected your idea. Having an initial patent pending also provides you with a 12 month period of protection. You can use this time to secure the resources necessary to take your patented idea to market. Furthermore, an inventor who has intellectual property, such as a patent application, will be far more attractive to a potential investor as this shows that you are willing to put up some of your own money in pursuit of your idea.
Any ideas or names you have for a new business concept or product that you might want to disclose during a pitch are worth discussing with an intellectual property lawyer before disclosing them to others. Our fixed price business startup packages are the ideal way to access such advice and these can be tailored to your individual requirements. So contact us today to ensure you are prepared to make the perfect pitch.
Tidman Legal is a firm of specialist business and intellectual property lawyers based in Edinburgh, Scotland.