Intellectual Property When Seeking Funding for Large Projects?
I’m not personally in commercial real estate, but I was curious about this question. Let’s say I’m Walt Disney looking to buy up all the land in Orlando (I know he used shell corporations to keep the purchases from driving prices up, but let’s not focus on that). I come up with a multi-phase development plan and present that plan to investors. What’s to stop them from just doing it themselves? E.g maybe they own their own property development company or have ties to one they like and can get a better roi with.
[{"id": "iczk4ma", "text": "This is a similar concept as when a founder or a startup is afraid to go to a VC firm for funding in the fear that they will \u201csteal\u201d their idea and run with it on their own. \nAny reputable company will no do that simply because that\u2019s not their business model and not their niche. In addition, when you approach a firm there is the first point of contact which can be traced back to them if they run with it and could open themselves up to litigation, again not worth it for them.\nIf your development plan makes financial sense to them, where they can benefit from it down the line, they will work with you. Simple as that.", "replies": [], "depth": 1}, {"id": "icznm1e", "text": "Generally make them sign an NDA prior to presentation", "replies": [{"id": "id0iztm", "text": "An NDA would cover them talking to a third party, but would it cover them doing it themselves if they own a development company?", "replies": [{"id": "id0ls0m", "text": "I\u2019m no real estate attorney but in the scenario a company did do that, I would assume u can sue for fraud? But other than that the other comments cover that answer pretty well.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iczxc48", "text": "It'd be bad business (reputation risk, litigation) for the investor group to steal your idea. Also, if you're the developer then I assume you're in a position to make the deal happen - local contacts, 3rd party consultants, plans, market knowledge, etc. You might even already have the land under contract and/or be in progress with entitlements. It doesn't make sense for the investor(s) to put in all that work and set up shop themselves.\n\nIf your plan is sound and you can reasonably deliver target returns, that's what matters to investors. Their role is to deploy cash for returns, not to do your job.", "replies": [], "depth": 1}, {"id": "id0iq83", "text": "What\u2019s to stop them from just doing it themselves?  Why is this the number one thing people point to. Sign a NDA and realize that nothing is unique and and plans are rarely stolen the actual product is", "replies": [], "depth": 1}, {"id": "id2zhlb", "text": "Few ideas are unique at this point.\n\nBut also to your point:  having the land under contract, assuming it's a high demand area with limited supply, stops them in their tracks.", "replies": [], "depth": 1}]