Inventors post their ideas confidentially and securely, without having to commit to any future involvement in starting growing or managing the future business - but keeping a large stake in it.

Managers with a broad range of commercial skills have secure access to these ideas, and subject to strict confidentiality select those that in their judgment and experience have the best profit potential. For this, the manager can grow a business in which he has his own large personal stake.

The first step is for the manager, at his own time and reputation risk, to define a not-for-profit 'Proof of Concept' project to test and confirm that all the factors needed to realise commercial potential are there - protectable intellectual property, market, price points, manufacture, and so forth.

Investors from Angels Den - again securely and confidentially - have access to those ideas pre-selected by the managers, and give their financial backing to the projects they choose. By backing the skills and experience of the manager, rather than the idea, they greatly improve the risk-reward ratio of investing and so have a far better chance of profit while absolutely limiting their downside.

Investors are guaranteed to be able to back the successful projects, or if they wish they can sell their rights to invest for an early, smaller, profit.

Inventor, manager and investor each have a minimum of 30% of the shares in the business. Because nothing can be realised until a cash exit the management have a real incentive to work towards this goal as early and as profitably as possible.

And in detail:

THE PROCESS - FIRST STAGE

• ‘Concept’ created by Inventor and posted on secure website
• ‘Concept’ is identified as possibly having significant commercial potential
  by highly skilled and sector-experienced Manager
• At his own time and reputation risk Manager specifies and costs ‘Proof of
  Concept’ project
• ‘Proof of Concept’ project paper written for posting for Investors and to act
  as project template
• ‘microFunding’ invited from Investors in units of £2500
• If sufficient funds raised successfully, subscription agreements
  completed by solicitors. Investors have priority rights to subscribe to next
  stage
• Company formed and IPR assigned
• The Project is independently supervised, and audited by a firm of
  Chartered Accountants

THE PROCESS - SECOND STAGE

If the concept is not Proven, then:

• Company and IPR are re-assigned back to the Inventor
• Any residual funds returned pro-rata to Investors - it is very possible that
  an opportunity will come up against a fatal flaw at an early stage, before
  all the enquiries have been completed and so before all funds have been
  committed
• Auditor provides Certificate; Investors may be eligible to claim tax relief on
  losses

If the concept is Proven, then:

• A report of the investigations provides the basis for the future Business
  Plan, and is circulated to priority Investors
• Investors decide whether or not to take up their right to subscribe further
• Exactly 30% of equity is available: if the assessed valuation is less than
  equitable for the required funding (and the deal is nonetheless worth
  doing), then part of the funds raised will presumably be as loan. If the
  value is greater than would be equitable, 30% is still available, which is
  the quid pro quo for taking the early stage risk
• If an Investor fails to take up his option to invest further, co-Investors have
  right of first refusal, and then the option is saleable on the open market,
  possibly for a significant gain in the right circumstances!
• 30% of the equity is for the Inventor
• 30% of the equity is retained by the manager for performance-related
  options
• 2.5% is retained by microFunding for fees; and 7.5% is retained for
  contingencies but this may not ultimately all be issued
• (if appropriate and required) EIS applied for
• Shareholder agreements completed by solicitors

THE PROCESS - THIRD STAGE

Once the business is funded:

• The manager's role now starts in earnest. His main reward for succeeding in this process will be when he can sell his shares. This means that the Manager is very motivated to create a favourable exit in as short a time as is realistically possible for as high a value as possible

Which is surely what everyone else wants too, isn't it?