Myth 5: Crowdfund first, protect later
More and more entrepreneurs are looking to rewards-based crowdfunding when it comes to raising money. It’s quick and fairly easy to launch a campaign on Indiegogo or Kickstarter to try and get a project of the ground. But the appeal of a large crowdfunding platform – the ability to get your product seen by people all over the world – also represents a potential pitfall. If you’re not careful, your crowdfunding campaign can be your company’s undoing.
When you create a campaign for your product on a crowdfunding site, you’re putting your idea out there for the world to see. And not just the benign average contributor – you’re letting potential competitors see it as well. While most people are good enough to not attempt to steal or copy your creation, it only takes one person to cause serious and irreparable damage to your company. Some are even bold enough to create an identical crowdfunding campaign.
Crowdfunding is different than making a pitch to a set of accredited investors or investors who have signed non-disclosure agreements. Without the right protections in place, you run the risk of losing everything you’ve worked hard to build. Before you start your crowdfunding campaign, take the time to make sure you have protected your intellectual property against theft. It’s helpful to have a strategy about what you’re going to disclose about your product to prevent any accidental disclosures from you or your employees or even risking your right to patent in the US or internationally.
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