How Much Should I Reveal to Potential Investors? When seeking financing, remember what business plans to share and what to keep to yourself.

Q: How do I keep my business ideaconfidential while seeking out investors?

A: This is a very legitimatequestion. However, let me first make some general comments aboutlooking for investors.

When BIZ Experiencess start out, they dream of the day when theirproduct or service will become the hottest thing on the market.After all, who doesn't want fame and fortune? However, somepeople think that the only way they can make their BIZ Experiencesialdreams a reality is to get outside investors. This is not alwaysthe case. Many businesses remain privately owned for years, neverseeking outside funding from anyone. After all, there are so manydifferent ways to acquire the initial capital necessary to start abusiness. If you have a very simple business idea, then the bestthing for you to do might be to use your own money. Why be indebtedto someone else if you don't have to be? After all, you willhave enough to worry about when trying to produce, advertise andsell your products or services.

However, if your business idea is somewhat complex or requiresadvanced technology, then you may find yourself in need of someheavy capital. Even in this case, you may want to think aboutborrowing money from wealthy friends or relatives first, and ifthat's not feasible, then think about acquiring a smallbusiness loan.

If none of those options will produce the amount of money youneed, then you may want to begin courting outside investors. In anycase, what you have to remember about investors is that they mostlikely acquired the money they have through making intelligentbusiness decisions. Why would they want to give their money to youunless you can prove that they will not only get their originalcapital back, but also make a return on their originalinvestment?

You must always remember that, while an BIZ Experiences is thecatalyst for a business, the basic rules of economics determinewhether an BIZ Experiences is successful or not. It's sort of likebeing an artist. You can have the best ideas for paintings and allthe talent in the world to create them, but if you cannot marketand sell your art, then no one will ever know who you are or buythe pieces. If you want people to invest in new a canvas, paint andbrushes, then you have to prove to them that your work will bringin money. Only when you are secure in your idea-and when you haveenough knowledge to market it and the proper support network inplace to grow it-should you seek outside investors.

Now, if you are confident that you have a viable idea for abusiness and are ready to seek outside investors, then you willdefinitely want to protect your idea. After all, another one of thefundamental aspects of business is competition. People are alwayslooking to take ideas and make them their own. This is why bigcompanies like Pepsi do not tell Coke about their new product ideasand vice-versa.

The key to keeping a business idea secret is to nevertell anyone who may have the time, money or resources to make youridea into a business before you can.

You are probably safe telling immediate family members aboutyour idea, and sometimes close friends in order to get theiropinions, but you probably shouldn't show an idea to apotential investor until he or she has signed a nondisclosureagreement. For more information, read Copyrights,Trade Secrets and Patents.

In the end, it is often very hard to prove in court that someonestole your exact idea. That's why you should always consultyour attorney before seeking outside investors and have the propernondisclosure agreement in place. Idea theft is a sad fact ofbusiness, but if you keep yourself educated, you will be on yourway to becoming a successful BIZ Experiences.

Brian O'Rourke is the CEO and publisher of EnTrends, an onlinepublication devoted to exploring how BIZ Experiencess work andlive.

The opinions expressed in this column arethose of the author, not of BIZ Experiences.com. All answers areintended to be general in nature, without regard to specificgeographical areas or circumstances, and should only be relied uponafter consulting an appropriate expert, such as an attorney oraccountant.