Dear Don,
I have a new product idea that I’ve been developing but I don’t have enough money for my initial prototype so I can run some tests.  I already tried asking my friends and family for funding, but no one wanted to invest.  Do you have any other suggestions?
                                                                                                -Tony

Dear Tony,
Many inventors make the mistake of thinking that friends and family will invest simply because you ask them.  Most people are more careful with their money than that.  You really need to impress them with your product, its potential and your businesslike approach.  I recommend that you prepare some documentation and resubmit your funding request.  Follow these steps:
- Have an art student or a graphic designer draw your idea.  If possible, do an advertising layout incorporating the drawing.
- Prepare marketing information about your product, including competing products, target customers, your competitive advantage, the projected retail price and market price.
- List short-term goals for your project, such as making a prototype or finding a person in potential distribution channels that will help you.
- Prepare a budget for each item you need.
You might also consider offering shares of stock in the company for 10 or 20 cents per share.  A low stock price gives people hope that the stock will increase in value.
Selling stock requires you to incorporate and will incur legal costs.  To learn how to set up a corporation, visit you local Small Business Development Center (www.sbaonline.gov).  If you can’t afford to incorporate just yet, then promise your investors that when you do incorporate, you’ll issue them shares equal to five times their investment.

For more information on how to do fund raising, I would recommend you look at my new book Bringing Your Product to Market... In Less Than a Year.