Arthur D. Little Enterprises licenses promising inventions, assuming the up-front risk.
Arthur D. Little Enterprises (ADLE), a profit center within the renowned consulting firm, is in between an inventors' support group and a venture-capital firm. It's the kind of place you should know about if you are an inventor or have a small company with good ideas but no way to get distribution. And if an employee-less "virtual corporation" is your thing, well, ADLE is hip to that, too.
So what's the catch? Unlike the inventor scams, ADLE rejects about 98% of the 500 to 800 ideas that come its way annually. Think of it as another market reality check; if you can manage to get more than a form letter from this group, you may actually be onto something.
If your idea takes the group's fancy -- medical products, consumer electronics, and packaging are the in niches -- ADLE is prepared to take the up-front risk, by, for example, creating a prototype and shopping it around to potential licensees, or doing a full-blown feasibility study, which can cost ADLE at least $200,000.
In return, ADLE usually takes ownership of the patent. Should the gadget go to market, ADLE negotiates royalty fees and splits the royalties with the inventor (or the company spinning off a product line). "We're not venture capitalists," explains ADLE president Bernard Lacomis. "We don't put millions into start-ups. We would rather license."
Making the cut is tough: ADLE wants products that can deliver at least $5 million in revenues in five years. At best, one in five good ideas is licensed, and fewer make it big, says Lacomis. ADLE has struck gold about 10 times in 10 years, he says. The current hot product? A clever electronic device that lets TV viewers delete ads from shows they record.
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"There are many well-funded companies with distribution channels. So why do it yourself? Product ideas are easy, but you simply can't buy distribution. In today's world it's a lot less risky to go to licensees."
-- Jerry Iggulden of Encino, Calif., creator of the Commercial Brake
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Calling All Inventors . . . Arthur D. Little Enterprises works with promising inventors and small companies across the country. Send ideas to president Bernard Lacomis's office at Acorn Park, Cambridge, MA 02140-2390. The Battelle Memorial Institute offers similar services (wanted: advanced scientific technologies). Write to Invention Administrator, 505 King Ave., Columbus, OH 43201.
For help discerning legitimate inventor consultants from the crooks, see the Federal Trade Commission's free pamphlet Facts for Consumers: Invention Promotion Firms. To order it, call 202-326-3268. For moral support, contact one of the many inventors' groups that dot the country, through the National Congress of Inventor Organizations, in Logan, Utah, at 801-753-0888.