Legal Question in Business Law in California

Any attorney will say a review of all facts, documents, etc. regarding your situation and "idea" is required. This is not a simple bulletin board type question. Consult with a good business attorney in your area for specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

There are four main methods that can be used, depending on the nature of the idea and the kinds of disclosures needed to attract investment. Usually it is better to use all four or as many as possible. They are: (1) True legal protection such as a patent application or grant. (2) Agreements not to usurp the idea, starting with the nondisclosure agreement or NDA, but since ideas can be usurped without true disclosure, the agreement should go beyond an NDA and also include no-work-around and non-compete concepts. (3) Careful choice of proposed financial partners, excluding any who are likely competitors and favoring long-established financial institutions that stick to financing and have reputations to uphold. (4) Withholding one or more vital elements of the machine or process, so it can be demonstrated to the investors but not copied. There may be other possibilities.

Yes, and there may be other ways depending on the idea. You would be well off to talk to a lawyer before meeting with potential investors.

Raising money for a company is regulated by state and federal securities laws, so you will also want to talk to a lawyer regarding that process.