If I Pitch an Idea to a Private Investor, What Happens If They Steal It?

Posted by Robert Norton on

Ideas are worthless. And it would be totally legal for them to steal them. Maybe you are confusing patents, copyrights and other intellectual property.

An “idea” has no legal protections. And you can be pretty sure you are not the first one to have any given idea too. And if anyone can steal a single “idea” and replicate your business, it is a very bad business. What you need is lots more including many things like a business model, target market, product/service and hundreds of ideas.

Companies need a team, plan and many protectable ideas. These are protectable intellectual property when kept as trade secrets, patents and copyrights. Almost every company should have some of these and contracts with employees to prevent them from taking them.

Investors do not sign non-competes or non-disclosures because they need to meet too many people.

Frankly, if your “idea” is all you have, you should not be talking to investors as you are not going to raise any money. The value of your company is $0, and that is your stock price. Pre-money valuation is created by team + product (MVP) + plan and more.

Often “traction” which means actual sales and can give you years of a head start on someone that might try to compete or replicate your business. Companies operate in “Stealth” mode to prevent competitors from starting before they go public with their product or service. A real business has hundreds of ideas, processes and “trade secrets” or patents that are protectable.

When you buy a franchise, you are buying all their ideas, systems recipes, training, etc. When you found your own business, you must create that value. This must come from sweat equity or cash you invest, or “Friends and Family” money from people who know and trust you. And presumably would not steal your idea(s).

I suggest you check out my free 1-hour course here that reviews the many skills needed to start a substantial company. And the 40 courses to help with your entrepreneurial journey. https://www.ceobootcamp.us/the-entrepreneur-s-journey

And then you should review the courses for entrepreneurs here, including complete courses on raising financing. https://entrepreneurshipu.com/collections/individual-courses

Register for a free workshop on growing companies at: https://airtightgrowth.com/growth-and-scaling-workshop/ This monthly event is for CEOs at $1M plus companies and those preparing to scale in the years to come. It is held on the first Wednesday of each month and replays are sent to registrants. All twelve sessions are available for a fee, with recording for your entire management team. And get lots of free resources for startups under $1M annual sales at www.EntrepreneurshipU.com. We help companies get to $10M, then $100M in sales after product-market fit is achieved by installing everything needed to scale. See www.AirTightGrowth.com 

Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. He helps established companies scale faster using the six AirTight Management™ systems. And helps companies raise capital.

What can we help you with today?  Scaling, training, consulting, coaching?
 (619) SCALE06 or (619) 722-5306 9am-6pm CT
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