Funding Your Invention (Without Going Bankrupt)

If you are a creative individual at heart, you may already have an invention idea or two up your sleeve. However, realizing your invention requires a more entrepreneurial spirit. Even if you never intend to start a business based on your invention, there are still the matters of finding a market for your invention and filing for a patent. Once these preliminaries are complete, you might consider licensing your patent and collecting royalties. Alternately, you may wish to sell your invention idea outright.

However, before any of these actions can take place, there is usually the matter of locating interested parties who will provide up-front capital for you to build and market your prototype. Where do you find these interested parties? There are actually many different sites and approaches. Listed below are the most common ways in which inventors can obtain funding for their invention idea.

1. Venture capitalists/angel investors

Traditionally, inventors looked for venture capitalists and/or angel investors to pitch their invention ideas and receive funding. This is still the path that many inventors take; however, such funding has its pitfalls. For starters, venture capitalists, or VCs, are typically looking for big-time inventions that can net $100 million in a year. VCs will also “take the reins” of your idea and hire their own business executives, manufacturing company, etc. As a result, you and your invention might be completely written out of the picture.

Angel investors are more of the mind to simply provide you with your requested funds and leave you alone; however, angels are also looking to make a good return on their investment. Thus, angels will want to know if you have a product development team and if the group has any business experience. As a result, securing the typical angel sum of $50K-$2 million is very unlikely- or it might simply be more money than you’ll ever need.

2. Invention “realization” sites

There are online invention sites like Davison Inventing that will build and pitch your prototype for you. In exchange, you are asked to pay for prototype creation and any associated marketing fees. While some of these invention sites may be completely legitimate and helpful to budding inventors, my experience with Davison was not ideal: while the site does have a self-publicized track record of bringing some inventions to the marketplace, there is also a lot of criticism from burned inventors who shelled out $10K+ and never saw anything result from their investments.

Personally, I became suspicious of Davison’s business practices when any invention idea that I pitched to the company was immediately accepted as brilliant and marketable. I also did not hear of any inventor receiving his/her rejected prototype back after spending the money to have it built.

3. Crowdsourcing

For about three months, I participated in an invention crowdsourcing site called GeniusCrowds. This site solicits invention ideas from an online community in the categories of children’s toys, tools, hobbies, etc. Community members vote for their favorite invention ideas and those ideas with the largest number of votes are supposed to receive special consideration by the participating companies (which are never named). These companies also perform their own evaluations of the invention submissions.

Some community members were in fact selected for “the next step”, but no one was really informed what that step entailed. There was also a lot of community controversy concerning idea theft, since most of the product ideas presented on the platform had not been patented. In the end, I quit GeniusCrowds because I found it to be a waste of my time; furthermore, I preferred to keep my bigger ideas under wraps until I received at least a provisional patent for them.

4. Invention contests

There are quite a large number of invention contests out there with the prizes being rather hefty: for example, Walmart sponsored an invention contest that offered contestants the possibility of having their inventions stocked on Walmart store shelves. Other invention contests include the Rubber Band Contest, Collegiate Inventors CompetitionWood Stove Design Challenge and Proto Labs Cool Idea contest. There are also invention sites, such as Invent Help, that aggregate invention contests.

Sure, contests can be a long shot and require a lot of preparation, but most do offer honest feedback about your invention idea if you are not selected as a winner or finalist. Such critique can be invaluable for your future work. Furthermore, most contests make the utmost effort to protect your intellectual property rights. Of course, winning an invention contest is even better and offers you the opportunity to build your prototype, show off your invention in magazines and/or trade shows, work with a company to commercially develop your product, etc.

5. Crowdfunding

Lately, the best resource for budding inventors has been the rise of crowdfunding sites such as Kickstarter an Indiegogo. These sites allow inventors to post their invention ideas along with funding goals (e.g., $5,000) and have the online community “back” those ideas with pledges. In many cases, backers have funded invention prototypes that have then gone on to attract attention from outside manufacturing companies. Backers are usually rewarded for their pledges with the actual invented item; for example, Pebble Technology Company raised over $10 million on Kickstarter by promising to ship a Pebble watch to any backer pledging $99 and above.

While there has been some worry over publicly disclosing invention ideas through crowdfunding sites, these ideas should be reasonably protected from being scooped if they have at least a provisional patent filed with them. Also, the inventor is not obligated to form a partnership with or otherwise hand over control of the invention to his/her backers. Due to these advantages, crowdfunding may be the best and fastest way to fund your invention.

Scam Alert: Is Your College or University a Diploma Mill?

Recently, a friend of mine who received her bachelor’s degree from Westwood College was shocked to discover that she did not qualify for the master’s degree program at a national university.

The reason? Her bachelor’s degree was considered bogus because Westwood College is not regionally accredited. In fact, Westwood College is only nationally accredited.

Other Westwood alumni have also been surprised to discover that their degrees are considered useless by employers; as a result, some of these alumni have sued Westwood. In January of 2012, the Illinois State Attorney General also filed a lawsuit against Westwood, stating that the school’s (which is actually run by several corporations as a “DBA”) “many misrepresentations or false promises to Illinois students and prospective students constitute violations of the Illinois Consumer Fraud and Deceptive Business Practices Act”.

What is accreditation?

In order to be considered legitimate, post-secondary schools in the U.S. must be accredited by a government-recognized accreditation agency. The two big accreditation categories are national and regional. National accreditation is currently applied to non-traditional schools such as online or distance learning universities. Regional accreditation, meanwhile, has typically been applied to liberal arts schools that operate in a more traditional sense (e.g., use in-class instruction).

There are six regional accreditation agencies, with each agency covering a given geographic region in the U.S. You can check if your school of choice is accredited by one of these regional agencies by finding out where the school is located and then going to the specific regional agency that would be in charge of that school’s accreditation.

Overall, regional accreditation is much more valuable than national; also, a school that passes regional accreditation will typically have no trouble gaining national accreditation. The reverse is not true. Furthermore, so-called “diploma mill” schools fail to achieve either regional or both regional and national accreditation.

What is a diploma mill?

Westwood College, alongside other institutions such as the University of Northern Washington and Monticello University, is what is popularly termed a “diploma mill” or “degree mill.” According to the FTC, a diploma mill is defined as the following: “a company that offers ‘degrees’ or certificates for a flat fee, requires little course work, if any, and awards degrees based solely on life experience.”

Furthermore, “although many diploma mills claim to be ‘accredited,’ their accreditation is from a bogus, but official-sounding agency that they created.” This fits the bill for my own personal diploma mill of choice, Ashwood University (which actually operates out of Pakistan). I decided to check out Ashwood’s website one night and even chat with one of its customer service representatives. Here’s a synopsis of my chat:

Please wait for a Site Operator to respond!
Info : You are now Chatting with Angelo Parker.
Angelo Parker : How may I help you?
Halina: I’m looking at a degree in biology
Angelo Parker : Sure. How many years of working experience you have in the field?
Halina: I took some high school biology
Angelo Parker : I see.
Angelo Parker : So you want to study or you need a degree based on your experience?
Halina: what courses do you offer? I’m hoping to get a bachelor’s in biology so I can eventually start a Ph.D.
Angelo Parker : Well this is a life experience degree program. We award you the degree on the basis of your working experience and past qualifications. What we do is we take down your life experience and convert them into credit hours.
If these credit hours are equivalent to the credit hours that are required to complete your desired degree then you qualify and we award the degrees accordingly.
Angelo Parker : So there are no courses or classes with us
Halina: OK, but then is this legit for a Ph.D. program at a school like Northwestern?
Halina: I forgot to mention that I did work as a lab tech for a few years. But I don’t have a BS or BA in biology
Angelo Parker : I see. Well now you can get a degree with us in 15 days based on what you already know. The fee for bachelors will be $599
Halina: OK, but will this transfer to Northwestern University?
Angelo Parker : Yes it sure will.
Halina: Do you have any stats about transfer students and how well their degrees transfer to universities like NWU or University of Chicago?
Angelo Parker : Well as the documents are recognized and accredited. You will not be facing any problems getting it accepted
Halina: So, is Ashwood regionally accredited then?
Angelo Parker : Its nationally and internationally accredited
Halina: which national agency?
Angelo Parker : Its mentioned on the website
Angelo Parker : Please check the accreditation tab
Halina: Neither of those agencies are mentioned on Northwestern’s website as recognized. They are asking for regionally accredited agencies like the north central association.
Halina: You said the degree was recognized by Northwestern.
Info : Chat session has been terminated by the site operator.

When I tried to reconnect with Angelo, my chat was terminated immediately. Was it something I said? In any case, if all I need is $599 to get a bachelor’s, why oh why did I spend 4+ years at a community college and then a state school? I really should’ve known better- and apparently my “life experience” bachelor’s degree does transfer to Northwestern University!

Not all schools are as blatantly deceptive as Ashwood University. Westwood is actually nationally accredited by the Accrediting Council for Independent Colleges and Schools (ACICS), which is recognized by the U.S. Department of Education (DOE). In contrast, Ashwood is “accredited” by scam accreditation agencies such as the Board of Online Universities Accreditation (BOUA) and the World Online Education Accrediting Commission (WOEAC). These two agencies are not recognized by the U.S. DOE and may as well be imaginary.

Unfortunately Westwood, although nationally accredited, is not regionally accredited by any of the six national accreditation agencies recognized by the U.S. DOE. This means that most post-secondary and regionally accredited schools (e.g., Penn. State) will not recognize a degree from Westwood as legitimate. Furthermore, many employers will also not recognize a degree from a non-regionally accredited school as legitimate.

However, the fact that Westwood is at least nationally accredited means that its students do qualify for and receive federal student loans. This is because the U.S. government only requires that a post-secondary institution be accredited by one U.S. DOE-recognized accreditation agency in order to receive federal funds.

As a result, many Westwood students end up with $60,000+ in student loans by the time they receive their degrees, which is just perfect for the bottom line of a for-profit school like Westwood. Unfortunately for the students, their monetary investment in a Westwood diploma isn’t as worthwhile.

How can you avoid a diploma mill scam?

True institutions of higher learning used to be easy to spot- they were the “classic” brick-and-mortar-and-ivy schools portrayed in such movies as “Back to School”. Nowadays, many colleges and universities are completely online and operate out-of-state or even out-of-the-country. For all you know, these schools could be operating out of a P.O. box or someone’s basement.

However, even the physically present colleges and universities can be scams. After all, it’s not hard to rent a few rooms or even a building, slap a school logo on the doors and call sham classes into session. When a scammer is reaping tens of thousands of dollars per student, even paying several thousand dollars for a physical school is worthwhile in terms of return on investment.

Thus, if you are thinking about signing up with a relatively unknown college or university (i.e., no known alumni and recently founded), first check this school’s accreditation. Then, check the school’s reported accreditation agencies against those posted on the U.S. DOE website and see if they are federally recognized.

Finally, go to the respective regional accreditation agency, such as the North Central Association’s Higher Learning Commission, and input your school of interest. If your school doesn’t pop up, look elsewhere for your educational aspirations.

Beware of schools that claim that you can receive a degree for your life/work experience with little or no class time. A bachelor’s degree that takes just a few months to complete, classes where almost every student gets an “A”, and pressure by school advisors to receive as much financial aid as possible all hint at a diploma mill scam. In short, do your research and utilize your critical thinking skills for more than just class tests and quizzes.

Congratulations, Murphy!

On a happier note, my dog Murphy just received his acceptance letter from Ashwood University. I listed Murphy’s life experience in biology as working in a medical lab (he went to several veterinary appointments with me) and proctology (Murphy excels at butt-sniffing). Here is his congratulatory letter on his upcoming bachelor’s degree in biology:

Congratulations Murphy!
We are pleased to announce that based on your resume and your profile score calculated using the CPAAS® profile evaluation system, the evaluation committee at Ashwood University has finally approved you for Bachelor’s Degree.        You are among the 5% of candidates who qualified under the CPAAS® profile evaluation system.

CPAAS® is globally renowned and patented evaluation system that performs detailed analysis of your resume, online profile, past accomplishments, and professional and educational background through proprietary global libraries and databases.

You can now pay the amount from the link provided below and get your Bachelor’s Degree within 30 days from today. Once you make the payment, you will also be able to access the Alumni Area of Ashwood University and get exclusive privileges and discounts.

Future Ashwood University baccalaureate

I always knew Murphy was smart.

12 Ways to Earn Extra Cash with Paid Online Focus Groups

In one of my more risqué moments of earning side cash (and before the advent of paid online focus groups) while completing my graduate studies, I got to look at market campaign ads for K-Y Jelly.

A group of about 10 women, including me, sat in a small room and commented about which ad appealed to us the most and why.

While we wrote down our responses and then discussed them amongst ourselves, our discussions were monitored by observers sitting behind two-way mirrors.

At the end of an hour, we exited the room and collected our $60 checks at the front desk.

I ended up making $120 because I participated in two such ad campaigns.

Later on in my life, I participated in a weekly online market research survey that was conducted for Domino’s Pizza.

Each week, I answered five multiple-choice questions about the company and/or its products. Each answered question earned me a dollar. At the end of the five week study, I had amassed a tidy $25 which was paid to me via Paypal.

In both the cases noted above, I participated in a consumer focus group.

What are consumer focus groups?

Companies that are about to launch a new or improved product typically gather consumer feedback about that product prior to launch.

This helps tweak the product to fit different consumer needs and/or address concerns. Consumer focus groups typically consist of 8-20 members that match certain demographic requirements (e.g., a strong likelihood of using the product).

These group members are asked questions by a moderator after reviewing the given product; their responses are recorded and analyzed via (usually) hidden third-party observers. For their efforts, focus group members are paid quite well, with some members earning as much as $100/hour.

Paid Online Focus Groups are the New Norm

Consumer focus groups used to operate strictly on-location in big cities like Chicago, San Francisco and Atlanta.

Focus group participants would have to go in person to designated locations and spend anywhere from half an hour to even several hours on-site.

Back then, most companies feared that online focus groups, where participants were unseen and unwatched, would dilute data quality.

Today however, many (though not all) companies prefer the online consumer group format, feeling that it encourages a truer response because the participant is not being affected by the act of observation (also known as the observer effect). This is great news for folks who wish to work from home or who reside in rural locations.

How you can get involved in consumer focus groups

There are several well-known market research companies that regularly recruit focus group participants.

I’ve compiled a list of companies below that are actively looking for participants.

Sign up for as many as possible.

Invitations come infrequently, but by signing up with all of the companies below, you will maximize your chances of actually getting to be able to participate and get paid.

12 Paid Online Focus Groups to Join

In some cases, the companies operate both online and in-person focus groups. 

Here is a list of companies that you could consider:

1. Swagbucks

Swagbucks allows ANYONE to take part in short, easy focus groups.

They also have daily surveys and poll their users and offer rewards for participating. Quick, easy, free. One of the best. Free $5.00 offer just for signing up.

Don’t pass this one up.

2. Pinecone Research

Pinecone Research

As a Pinecone Research participant, you will get to evaluate new and upcoming products from some of the world’s biggest brands.

You get paid cash via Paypal or check for sharing your opinions.

This one is a must join.

3. Survey Voices

You have a voice and companies are paying top dollar to hear what you have to say.

Sign up, confirm your email, and start helping brands shape their products and you will get paid just for sharing your opinions.

4. 20/20 Panel

This company has been operating since 1986 and pays $50-$150 per focus session, which may be performed through in-person focus groups, one-on-one interviews or online sessions.

The studies can involve a few hours of your time and/or may also be spread out over the course of one to several days.

Prescreening (i.e., filling out a short qualification survey) is required if you wish to be considered for inclusion in an upcoming focus group or product test.

5. Adler Weiner Research

This marketing research company offers in-person focus groups in the Chicagoland and Los Angeles areas.

The reported pay for 1-2 hour focus group participation ranges from $100-$200.

6. FocusGroup

This site pays $75-$150 for each successfully completed survey.

Participants must take an “eligibility screener” before being assigned to any online studies and must later pass four stages of screening.

7. MindSwarms

This site has you answer in-home survey questions for $50/survey.

However, you must answer these question via your webcam, which means that you must have your computer set up to record audio and play video.

Surveys are estimated to take about 20 minutes and require a prescreening.

8. Nichols Research

This San Francisco area company pays its participants $225+ for focus group studies that run as long as 8 hours.

Participate in focus groups, surveys, in-person or telephone interviews, product tests, online communities and more and get paid for your time.

9. Plaza Research

This company conducts in-person focus group discussions, telephone and in-home interviews and online surveys.

The focus group sessions last roughly 1.5 hours and pay $100+.

Manufacturer-based consumer focus groups

Major manufacturers often offer their own market panel opportunities via their corporate websites. Here are just a few manufacturers that you can work with to earn extra cash and/or receive free product:

10. Johnson & Johnson

This company offers consumers the opportunity to try new products, answers surveys and participate in focus groups to try out upcoming Johnson & Johnson ideas.

11. Summer Infant

If you have a baby on the way or a newborn at home already, Summer Infant is paying new parents to participate in focus groups and try out some of their new products.

12. Engage

Engage has broken down their research groups into two categories: regular consumers and those in the health-care industry.

Pay is determined by the company conducting the research, but Engage lists an average rate of anywhere from $50 to $250 to participate in a study.

Consumer Focus Group Drawbacks

Because consumer focus groups pay rather well, competition for these work opportunities can be stiff.

Thus, it’s best if you sign up with several market research companies and even follow them on Twitter or Facebook.  

If you are notified of a focus group opportunity, don’t delay in applying for it as spaces often fill up quickly. Also, in some cases the market research companies will overbook their participants; however, participants who show up and are turned away are usually compensated for their trouble.

Focus group screenings can take up a significant portion of your time, from filling out your personal information online to answering questions on the phone to filling out additional paperwork before you are finally “cleared” for the study.

Disqualification can result from something as simple as not having the right type of smartphone.

Fortunately, with many focus group sessions being conducted online, you’re less likely to get stuck clearing your work schedule and traveling downtown only to later find out that you’re not eligible for a particular study.

The Bottom Line

Paid online focus groups aren’t going to replace your full-time income, but they can be an excellent way to make a couple hundred bucks in a day.

Companies do care what you think and your opinions can help shape the future of some worldwide brands.

Plus, you get to see and use cool new products before they ever hit the shelves.

You may also want to look into getting paid to test products and joining online research studies if this line of work suits you.