The Best Way To Deal With Investors

[listenup]

I have a great idea for a business in Thailand and am in need of an investor. I'm hoping for some advice on how to deal with potential investors, as I'm really worrying they will steal my idea. For sure, I can bring a lot of my experience to the table, but that doesn't mean a potential investor could employ someone with with the same knowledge as me and run with the project leaving me behind. The business project is simple, has no competition, and is easy set up - An investors dream!... This is why I'm worrying.

In the UK we use Non-disclosure agreements, but from previous experience with working in the city, there are many ways to get around these, god only knows how the system in Thailand is regarding NDA's.

If you have faced a similar situation before, what did you do? What advice could you give me?

I appreciate any help and advice.

[Carmine6]

Would out of country investors be an option? Then you'd have the same legal protection you had back home and geographic impediments to them stealing your idea.

[N47HAN]

this i will be very intrested in seeing any usefull advice on ....

[rainman]

Depends. What's the idea?

[blizzard]

ideas are dime a dozen sir. you should put up your own money or ask your mom and dad for financing.

[Jersey_UK]

I have a great idea for a business in Thailand and am in need of an investor. I'm hoping for some advice on how to deal with potential investors, as I'm really worrying they will steal my idea. For sure, I can bring a lot of my experience to the table, but that doesn't mean a potential investor could employ someone with with the same knowledge as me and run with the project leaving me behind. The business project is simple, has no competition, and is easy set up - An investors dream!... This is why I'm worrying.

In the UK we use Non-disclosure agreements, but from previous experience with working in the city, there are many ways to get around these, god only knows how the system in Thailand is regarding NDA's.

If you have faced a similar situation before, what did you do? What advice could you give me?

I appreciate any help and advice.

I do fail the test of "If you have faced a similar situation before, what did you do?"........but I have never let a simple thing of not knowing what I am talking about stop me "contributing" before

As you correctly identify NDA's (and I would suggest even non compete clauses, once an investor / employees are onboard) can often be of little value in the real world, apart from to the lawyers £££ pocket who drew them up. Some things are universal and not just applicable in Thailand / SEA and I think you are being very prudent in considering potential problems at an early stage before they materialise into actual problems with £££ notes attached.

My initial thought is that if the idea is that good, then sooner or later it will be copied - and if it cannot stand competition then IMO it wasn't that good an idea after all. Obviously you have no option but to disclose the concept to potential investors and then full details to many who will not actually invest, as well as those that do.........

It does not sound like you have invented a new magic widget, so I guess you are either talking retail or services. If retail then anyone walking past your outlet, customers or suppliers can copy - let alone your investor / a potential investor ........but the question is then could enough of them run it as well as you? In Thailand.

Indeed it may not be altogether a bad thing for folk to copy to spread acceptance of a brand new concept / product, as long as you can become the market leader or can use it to your advantage. (Whilst McD and BK are major rivals they do help each other by spreading and reinforcing the message that the concept of eating proccessed <deleted> is great / acceptable / fun which benefits both brands........indeed the existence of both is now starting to create "real" burger outlets - many (me included?!) would have doubted that getting into the Burger Business with Mc D and BK as competitors could ever work!)...........what I am saying is that competition is not always a bad thing.

Low entry barriers does initially sound worrying.......but the advantage is that businesses like this attracts those wth the cash but not the business skills........like Bars and Massage places, a million and 1 in BKK (and Pattaya) but we all know that some are succesful (and some very very), but many many are not - the reason for not getting into these businesses is not because they are inherently bad or because they have a lot of rivals - the reason not to invest is because someone does not know how to run them - in the market place they operate.......or is not willing to invest the time, money and hard work required.

If services then perhaps you underestimate the ease in which someone can copy a simple idea and also run it well when it requires staff to be doing things when they are meant to. well........especially when out of sight.

Go on, give us all a clue!

[Solosiam]

If someone could copy your idea simply by hearing the idea, what's to stop Somchai from down the street or anyone else simply copying it and undercutting your price 3 months after you open?

[listenup]

Thats for all the responses. I like the idea of approaching investors overseas, as this would give them a delay in setting this project up in a country that has cheap labor (compared to the west).

Here's an example of why someone wouldn't be able to copy my idea if I was first to act and I was the first to get the business established.

A huge internet marketer (yes, my idea is internet based), created an Ebay affilate program that made sure everyone got paid on the highest tier, as all prmoters collectivly were under the same user.

For example (figures incorrect): Ebay has an affiliate program with a 20 tier payout structure... if you generate 1 sale per day for ebay, you get 1% commission, if you generate 5 sales per day, you get 5% commission, if you get 10,000 sales per hour, you get 20% commission. The guy created the technology to track every users sales/commission so that all users could generate the highest tier commission bracket. As the were 10,000 sales per hour across all promoters, if I joined and generated a sale per day, I earn 20% commission rather than 1% commission.

The guy that set the above up actually sold the business a few months ago as he didn't know how to handle the customer care side of the business.... 8 months later he sold it for millions.

Anyway, this is just an example. No one would have a chance to copy his idea now, as he already is the market leader and is 6 months ahead of anyone else due to having the system in place with customers, technology and marketing.

[H2oDunc]

I think it sounds rather like a pyramid selling scheme to me!

[blizzard]

sounds like he dont wanna put up his own money.....

[listenup]

That example is a pyramid selling system, nothing wrong with that. The system benefited everyone - The publishers, the guy that set it up and even Ebay. (The guy had meetings with the directors of Ebay) - This was done on a big scale!

Blizzard - What a childish response - Not everyone has big money in their back pockets to put into new ideas!

[Okidoki]

I am an investor but focusing on other areas then IT. (Even if I have thorough knowledge about that market....)

First of all, are you looking for an VC, investor or a businesspartner? The big difference is that an investor is working with his funds to generate funds... He doesnt want to work in the business.... We also want to invest in the good cases as well as in several objects. No one will put their reputation at stake, to steal one or two ideas. In my experience, you need to be honest and open about your idea, your financial situation and be able to present a businessplan, facts and of course a good budget. Of course the most important thing is the cashflow for the coming three years as well as you as a person. And your hunger to succeed! What drives you? If you are over the line that you thinking of selling one of your kidneys if your sales been slow, you might be interesting! I seriously doubt that any investor would "steal" a business idea. Unfortunately, the situation in Thailand doesn´t attract investments for the moment. But of course you can use an NDA with a penalty, however, we never sign any since we are meeting quite a few entrepreneurs....

A Venture Capitalist often uses private funds to invest smaller amounts. Then again he goes more by his heart and his feeling when he invests. Of course you as a person, not trying to rip him off is surely important.

Businesspartners... Most of us knows how this can end.... Put up a good contract from the beginning....

As an investor, there is absolutely no problem at all, to find investment opportunities.... But, my advice is to finance it yourself from the beginning and save the investmentround til you have proved your ability!

Good luck!

[listenup]

Thanks for the advice Okidoki

[blizzard]

you are wlcum sir. i said same same as oki, ask your mama and papa for capital.

my way is just more basic wthout the fluff.............lol.

ps. pyramids dont help everyone. only organizers profit.

[nemo38]

I agree with some of the above posters in that ideas are worth nothing of themselves. Before ebay started hundreds of thousands of people thought of the same idea but never followed through.

For my next project I'm following up on someone elses idea. That guy didn't have the drive, or the guts, to finance his idea. Now I'm to doing it. His share is.....zip, nada, nil. That is how much ideas on their own are worth.

[JR Texas]

If someone could copy your idea simply by hearing the idea, what's to stop Somchai from down the street or anyone else simply copying it and undercutting your price 3 months after you open?

This is an excellent point that makes the question moot in a way. NDA is necessary, but legally it will be paper without teeth. This is Asia.....in particular, this is Thailand........no rules, no protection........if it is a good idea it will be copied within one week, not one month or six months.

You just have to do it better than the other guy..........better at putting forth BS in advertising campaigns. Advertising matters! Look at the US where "advertising" put an idiot in office twice. So, what does that mean? It means you do not even have to have a good idea or product to win if you have a good advertising strategy.

We live in a strange world where quality seems to know longer matter..........just BS and image. "If they believe it, they will come."

[OxfordWill]

The "ideas are useless" brigade never did much online, did they?!?!

I was sort-of in your position a few years ago, and I found a reliable and honest chap who is an online investor who is based in Asia. I can put you in touch with him and you may end up working with me if it really is a great idea (lucky you!). I will not ask you what your idea is.

anyway if you're still interested (been a few weeks since this thread started) PM me.

Edited September 24, 2007 by OxfordWill

[dee123]

....psssstt ...anyone wanna buy a battleship?

[JimmieBlonde]

NDA's exist in Thailand, we use them regularly, however as someone else said if it's that simple to copy, then Thailand is the land of copying! Just look at the Soi's with nothing bt car tyre shops, sois of the same thing.

Good Luck, I know the feeling, I'm trying to get investor's now for our work in rural Thailand building self sstaining infrastructure, dam hard to do!

[VocalNeal]

Thailand is the land of copying! Just look at the Soi's with nothing bt car tyre shops, sois of the same thing.

It's not only Thailand . On the box I heard a foreign car executive say that R&D in China means Receive & Duplicate .