A problem we have encountered in trying to bring this invention into the world is that for a number of historical reasons traditional funding sources have become accustomed to a certain set of assumptions which have become so ingrained that they have taken on the appearance of some kind of natural law. In order to explain our approach, which differs significantly from this standard expectation, we must briefly explain why these assumptions have gained their traction, and why this invention should be considered in a different light.
The development of technology has followed the path of continual complexification. The Industrial Revolution was kicked off by the invention of several basic technologies, such as the Bessemer furnace and the internal combustion engine and others, and engineers devised means of using those technologies to do useful things. Over time, flaws and shortcomings were noticed, and a new generation of technology was designed to overcome these. Because as humans we like to follow a well-trodden path rather than forging a new one, and perhaps in the grip of the sunk cost fallacy, we almost always followed the policy of adapting these existing technologies by adding further complexity, rather than investigating whether it might be better to throw everything away and start over. Even when something wholly novel came along, such as the transistor, which did completely replace the vacuum tube, although each transistor was extremely cheap, the technology required to manufacture them was exceedingly expensive. In other cases replacement items required rare or hard to work materials. In every case we have been able to identify, we have never been able to find an essential technology that has been replaced by another that does not have a major drawback, usually higher level (and therefore more expensive) technology. Certainly these drawbacks were not sufficient to prevent adoption of the new technology, but they presented obstacles to adoption when they were first introduce, and thus increased risk for the investor.
Because of the culture of secrecy in our system, it is also quite possible to spend enormous sums developing some new improvement, only to be sidelined by some superior version you did not know about. In other words even the most promising ventures are highly speculative.
The result of all of this is that all new opportunities for investment in future development require the assembly of large amounts of capital, and that capital must assume a high degree of risk. At the same time the large numbers of aspirants to the ranks of the “next big thing” make this very much a buyer’s market. The capital interests have therefore been able essentially to name their price and enforce their terms. Consequently the universal understanding today is that anyone who funds a new project can demand a controlling interest in it. This means that all large businesses are operated primarily for the interests of the stockholders, even when those interests plainly conflicts with the interests of other participants, such as the workers, the customers and the public at large. In particular the initial investors, who often have little interest the business itself, are motivated to grow the perceived value of the company so that they can maximize their profit when they sell their shares soon after going public. This pressure towards early growth is often at odds with the long-term interests of the business.
It is our inviolable principle that our invention will never be promoted in a way that maximizes income or share value, but rather one that maximizes social benefit while still yielding a fair return. The ownership of the patent rights will be vested in a foundation of a kind yet to be determined. Its charter will forbid it either to sell any kind of equity in the technology, or hypothecate it in any way. the foundation will exist only to collect and distribute the income from the intellectual property. It will also be barred (other than to the extent required for the maintenance of a prudent reserve against hard times or patent defense or the like) from investing any of the income for further financial gain. Other than running the organization itself, and suitably rewarding the founders and others that we promise benefits to, all surplus funds (which we believe will be very substantial) will be used to fund projects for social rather than financial benefits, as donations rather than loans or equity investments.
Our purpose in this is to avoid what we see as one of the fundamental flaws of the form of capitalism practiced in the world today, which is the formation of large pools of wealth that are passed down from generation to generation, causing what we see as serious social damage.
Instead we will seek to maximize the use of the invention throughout the world, especially in poorer areas that can benefit most from it, since it can be manufactured in any reasonably well equipped machine shop. We will not grant any kind of exclusive licenses, but allow anyone willing to pay a reasonable royalty to use the technology.
All of this does not mean we are against the making of money, and we believe that early investors should be very well rewarded for their participation, and we (the founders) also wish to be well rewarded for our efforts. We will achieve this by providing something of genuine value to the world, and charging a very reasonable price for it.
What we are offering investors is a ten times return on their investment, payable as soon as we reach profitability. At that point 70% of our profits will be devoted to paying off our investors until everyone has been fully reimbursed, $10 for every dollar invested. At this point the risk factors are very low. We have seen that the theory of operation is sound, and all it takes is the building of a working prototype. We can show that there is manifest need in the world for what we are offering, and the sheer number of different applications means that even if one or two markets are resistant, we will have no trouble selling it somewhere! The only risk is that inherent in any project whatever, that some completely unforeseeable calamity will occur that prevents the execution of our plan.
The form of the business will be the licensing of intellectual property, which is a well understood business model, and there are many well-established businesses in the field. We believe that we would be in a very good negotiating position, considering the vast application of our technology. Indeed I would hope that we would be in a position to demand an advance against earned royalties for giving them our business. In any case I cannot imagine that very much time would elapse between our ability to demonstrate a convincing prototype and the commencement of an income stream.
Because of all of these factors, the amount of funding that will use sufficient to reach the point of profitability is almost laughably small, such that many traditional funding sources will not even consider it. We estimate that we will need a maximum of $250,000, and would hope that we would not even need this amount. This represents a two year span, at a burn rate of some $10,500 per month. The two years is a very outside estimation of the time it should take to produce a working model and demonstrate it. The actual cost of parts is quite low; even at one-off prices the material costs (gears, shafts, machining etc) will not exceed $15,000; the remainder accounts for overhead expenses of working space, utilities and incidentals. We envisage using at least one engineering consultant on a part time basis, and a part-time administrative assistant to keep track of the paperwork. Otherwise all of the work can be accomplished by one person.