partnership, partners, non-disclosure-agreementI have an idea to invent a particular type of electricity generator capable of generating electrical power for 7-days a week for the whole year. I need to build the product’s prototype with which I will seek investors to invest in the new company that will be founded for this purpose.
I am a software programmer but needed an electrical/electronic engineer who would help to build this product. I have two options:
Option 1 could be easily achieve but, even if the engineer have Non-Disclosure Agreement (NDA) signed, how am I sure the engineer who now knows the idea doesn’t go somewhere far to implement my own idea? Because of this, I decided to go with option 2.
I was able to get engineers interested in hearing what the idea was all about and I also explained to them the two options and why I wanted to stick to option 2. They showed interest but they were too earger to know how it would work. At that point, I simply told them we needed to sign partnership agreement before disclosure.
My worry is that these engineers that I have contacted all gave one or two excuses why they do not want to go ahead with the project after reading the Partnership Agreement, even after being told that the agreement can be negotiated so as to make both parties happy.
I am confused. Am I doing something wrong? They all seemed excited and interested when they were first told. Then they were eager to know how it would work, then give reasons for not being involved after going through the agreement.
I paid a professional lawyer with years of experience to draft the agreement. I even tell them that we could both negotiate the terms so that all parties are happy. What am I doing wrong? Should I go with option 1? What are the risk in any of the options? How can I find a good partner?
Part of what you’re trying to do, is get people interested without giving them enough details that they could walk away and create the idea without you.
Prove it’s worth me learning about: It’s a weird agreement, I would need some real convincing that what you are coming up with is unique, pratical, and sound physics. The problem is that you don’t give any clues until after you make them promise to follow your idea, even if it turns out that it’s garbage.
Show them some of the Math: Maybe you could “meet them halfway” by showing the engineering fundamentals behind your idea, with valid engineering equations showing how you are transferring some other type of energy into electrical energy, and describing how this system is able to create this energy at an acceptable cost.
There is no such thing as “Free” energy. It is all transferred from one source to another. You should be able to show someone that you have calculated what you think it will cost to create a prototype, and the cost when in production, and the ongoing costs of whatever is consumed or needs to be maintained.
A suggestion to your problem is that the engineers you have talked to are not entrepreneurs. They are technical people who are excited about an interesting gadget.
I think the person you need is necessarily both an engineer and an entrepreneurs. Most people are risk adverse and prefer to have the security of employment. Entrepreneurs don’t.
I would find someone who has been in business before, so go to tech meetups, maybe get in touch with VCs and ask if they know of any engineers who are entrepreneurs, talk to people and ask if they know anyone.
I think option 2 is a better option, especially if the other person has money they can put into the venture or experience they can bring as well.
A partnership is very similar to a marriage, imagine going up to someone you don’t know and saying “look, I’m a great guy, I have good potential, marry me”.
A partner not only shares in the profit and success of a company, but they also share the liability and failures. If somebody isn’t passionate about what you are asking them to do, then wanting a potentially unpaid partnership is asking quite a lot. Basically you are asking somebody to invest in you and your idea, without really sharing what it is. Requiring them to sign a partnership agreement before continuing talks is akin to asking them to blindly follow your promises.
So the best way to get an engineer is to first find one that is passionate about the kind of thing you want to do, and then offer to pay them. You can offer lower pay with the incentive of equity in the company, but I would avoid asking them to partner.
How do you find one that is passionate about your idea without disclosing it? Interview them just like a job. Somebody who loves what they do can talk and talk and talk about pieces and you’ll be able to see where it fits.
And last, how do you keep somebody from stealing your idea and running off with it? Well first you could file patents in every country that accepts them. This is expensive but it helps protect you legally. There are also reparations for somebody running off with your idea if you’ve documented quite clearly the idea, you can then pursue them in court. By all means though have them sign an NDA, its the first step in proving you were protecting your idea.
By the way power generation systems that offer “limitless” power are very hard pills for engineers to swallow. I know a company that once came up with the idea to take compact nuclear reactors and bury them in peoples yards to provide 100 years of power. They approached major nuclear power interests with the idea but despite having spent a lot of money on the idea they ultimately failed.
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