Your Idea Is Worth Nothing

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“I’ve got this great idea…”

How many times have you heard that? For me, it’s weekly, if not daily. But no one makes money on an idea. As a founder, you have to realize that ideas are easy, they are cheap, and everyone has one.

Too often I see people (not sure if I’d call someone with just an idea a “founder”) get too hung up on protecting their ideas and the phantom value the owner thinks the idea has. While an idea is definitively the genesis of your business, it has zero value until you build upon it.

People have walked into our office with an idea and 1) demanded that I sign an NDA and 2) told me they are starting their business at a $10M pre-money valuation. First of all, it’s not good form to ask an attorney, or an investor, to sign an NDA (we’ll talk about this more later). Secondly, unless you are part of the PayPal Mafia, your idea isn’t worth anything close to $10M.

Rather than worrying about protecting your idea, do something to breathe life into it. Build a plan. Build a deck. Build an MVP or prototype. Doing any of these things will move you from “person with an idea” to an aspiring founder and will bring you one step closer to launching your startup.

About the Author
Kevin Vela

Kevin is the managing partner at Vela Wood. He focuses his practice in the areas of venture financing, M&A, fund representation, and gaming law.

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