One of the quiet pleasures of running an angel group is programming the evening. You have a room full of people whose professional lives have taken them in wildly different directions: former executives, technologists, fund managers, and professional services partners assemble and prepare to listen. You need three or four pitches that hold the room’s attention across ninety minutes. Get the mix wrong and you lose people. Get it right and the energy builds through the evening.
Three enterprise software pitches in a row will test even the most committed audience. They may be technically excellent with sharp founders, clean unit economics, and well-defined total addressable market. But somewhere during the third explanation of a B2B SaaS platform solving a workflow problem in a vertical most people have never heard of, the energy dips. The questions become polite rather than probing. Phones come out and I’m second-guessing my programming choices.
However, a consumer product pitch, well placed in the programme, changes the room. The product is tangible. You can hold it, look at it, understand what it does without a glossary. The founder is often an inventor with a personal story. They can speak to a problem they experienced, an insight that arrived unbidden, or a moment of frustration transmuted into something physical and clever. These are among the most enjoyable pitches an angel group can host: more immediate than biotech, more viscerally exciting than enterprise software, and with founders whose narratives make the room lean in rather than reach for their phones.
And the economics are the same. The angel model is portfolio construction across a range of high-risk, high-return bets. A consumer product that works can deliver returns that match or exceed anything in the software portfolio. The payoff, when it comes, can be massive.
But – and this is the uncomfortable part – consumer product pitches also have the highest rate of what I would call structural misconfiguration. The founder has invented something genuinely novel, often brilliantly so, and then proposed a company structure and commercialisation strategy that makes success almost impossible. After more than eighty angel investments since 2013, I have come to believe that the difference between a consumer product pitch I back and one I pass on almost always comes down to the same thing: whether the founder understands what kind of company they are building.
The two filters
My filter for consumer product pitches has two stages. Both are eliminative.
First: is there a patent? If not, I pass. A consumer product without meaningful intellectual property protection is a features race against incumbents who have distribution, brand, manufacturing scale, and customer relationships you will never match. You might build a pleasant small business. But the risk-adjusted return profile for an angel investor is poor, because there is no structural barrier preventing a larger player from simply replicating your product once you have demonstrated that the market exists.
This is worth dwelling on, because founders sometimes confuse different forms of intellectual property. Know-how such as trade secrets, proprietary processes, and tacit knowledge accumulated through years of development is real, and it has value. But it is extraordinarily difficult to protect. It walks out the door with employees. It gets reverse-engineered by competitors who buy your product and take it apart. It erodes over time as the knowledge diffuses through an industry. For a consumer product that will sit on a shelf, visible and purchasable by anyone including your competitors, know-how alone is not a defensible moat.
A patent is different in kind. It is a published, enforceable, time-limited monopoly. It is the only form of IP protection that gives a consumer product founder a genuine structural advantage that can survive employee turnover, competitor analysis, and the passage of time. It is also, critically, the only form of IP that creates real value in an acquisition negotiation. A buyer’s lawyers can assess a patent. They cannot assess the contents of a founder’s head.
Second filter: does the founder want to build a manufacturing and sales company, or a patent commercialisation company? If the answer is the former, I pass again. Not because the founder lacks talent or ambition, but because they have chosen the most capital-intensive, operationally complex, and strategically vulnerable path available to them.
The manufacturing trap, especially from Australia
The instinct to build is deeply human, and I respect it. The founder has invented something remarkable. They want to see it manufactured, packaged, marketed, and sold. They want to build the whole thing. The problem is that “the whole thing” is extraordinarily expensive, and for an Australian founder, the structural disadvantages compound relentlessly.
Australia is a wonderful place to live and a terrible place to manufacture a consumer product at scale. Input costs like raw materials, energy, and components are high relative to competing manufacturing economies. Labour is expensive. Australian wages, superannuation obligations, and workplace regulation make labour-intensive production uncompetitive. And the domestic market is small. Twenty-seven million people is not enough to achieve the production volumes that drive unit costs down to internationally competitive levels. Australia is not a natural end market for a manufactured consumer product, which means the founder must also solve international distribution – a problem that adds further capital and complexity.
Then there is China. It is difficult to overstate how formidable China’s manufacturing ecosystem has become. The depth of capability, the speed of iteration, the cost structures, the sheer density of supplier networks dwarf its competitors. An Australian founder who sets out to compete on manufacturing is fighting the most capable production economy in human history. This is not a battle that capital-constrained startups win.
None of this means manufacturing is impossible. Assembly in Australia from components sourced across multiple suppliers is viable and, in some cases, strategically sensible, particularly where the sensitivity of the IP demands local control over the final integration step. But the founder needs to be highly deliberate about what gets manufactured where, and the default posture should be to minimise the manufacturing footprint rather than maximise it.
The ribbon and the trap
There is a particularly seductive version of the manufacturing trap that catches founders who might otherwise know better: the government grant.
Politicians love consumer product stories. A local inventor, a clever product, a new factory, smart jobs in the electorate. The ribbon-cutting ceremony is irresistible political theatre. Governments at every level offer grants, subsidies, and co-investment to encourage local manufacturing, and a capital-constrained founder who has just been offered several hundred thousand dollars to build a factory will find the offer very hard to refuse.
And so the trap closes. The moment the ribbon is cut, the politician moves on to the next photo opportunity. But the founder is now locked into a manufacturing facility that may be in the wrong location, at the wrong scale, with the wrong cost structure. The grant came with conditions (employment targets, production milestones, clawback provisions) that constrain the very strategic flexibility the founder most needs. Capital that should have gone into market validation, IP protection, and building the proof case for acquisition has instead gone into bricks, equipment, and production staff.
Worst of all, the end buyer will not value it. When the category incumbent acquires the company – which, remember, is the entire point of the exercise – they will shut the factory down. They already have manufacturing at scale, in the right locations, at the right cost structures. They are buying the patent and the market access, not the production line. Every dollar the founder sunk into a grant-funded factory is a dollar of destroyed value from the acquirer’s perspective. The grant did not create wealth. It diverted capital from the activities that create wealth and locked it into an asset the buyer will write off on day one.
This is not a counsel of despair. It is the opposite. The founder who recognises that manufacturing is a problem to be outsourced, managed, and minimised, rather than a capability to be built with public money, has freed up both the capital and the headspace to focus on the thing that actually creates value: commercialising the patent.
Your best salesperson is you
If the founder is not building a factory, what should they be doing with their time? The answer, increasingly, is becoming the face of their product on social media.
The economics of founder-led social media are dramatically better than the alternatives. Google and Meta advertising is the default go-to-market for most direct-to-consumer brands, but the platforms have become extraordinarily efficient at capturing the economic rent. The founder pays to acquire a customer, the platform takes its margin, and the unit economics of customer acquisition grind relentlessly against the business. It is a tax on growth that never goes away.
Paying an external influencer is better in some respects but carries its own problems: the campaigns are expensive, the effect is transient, and the audience increasingly recognises (and discounts) paid endorsements. The authenticity that makes influencer marketing work in the first place is undermined by the commercial relationship.
A founder who tells the authentic story of their product, from how it was invented to what problem it solves and why it matters, has an advantage that no paid campaign can replicate. The narrative is genuine, the passion is real, and the media cost is zero. If the product is genuinely good, something even better happens: organic influencers discover it and promote it for free, because good products make good content. The founder’s social media presence seeds the ecosystem, and the ecosystem amplifies it.
This serves the acquisition strategy in a way that paid advertising never can. Potential distribution partners and acquirers see the product gaining traction in their feeds. Their category managers notice it. Their marketing teams flag it. And when the conversation eventually happens, the dynamic is fundamentally different depending on who initiates it. An inbound enquiry from an incumbent who has been watching your product build momentum carries vastly more negotiating leverage than an outbound approach from the founder. Inbound says “we need this.” Outbound says “please buy us.” The difference in negotiating dynamics is enormous, and the founder-as-influencer model is the most capital-efficient way to engineer the inbound call.
What a patent commercialisation company looks like
Start with the end. The natural acquirer of a patented consumer product is the category incumbent: the company that already owns the shelf space, the brand trust, the distribution relationships, and the manufacturing scale in the product’s category. This is the company for whom your product fills a gap in their portfolio that they can see but cannot access, because you own the intellectual property. There might be two or three of these in any given category, and the ideal scenario is that more than one recognises the opportunity simultaneously.
Once you have identified the buyer, every dollar spent should serve one purpose: making it irrational for them not to acquire you. The playbook has three phases, and the total capital required is a fraction of what a manufacturing build would consume.
The first phase is validation and protection. Get a working prototype into consumers’ hands and generate hard evidence of demand. Crowdfunding platforms serve this purpose elegantly. They validate demand, generate revenue, build a customer base, and create public visibility, all simultaneously and without traditional marketing spend. In parallel, file the patent broadly and internationally in the jurisdictions that matter. If budget is tight, a PCT filing buys time. The founder’s job in this phase is to generate a number that makes the market opportunity tangible to a future buyer. Six to twelve months. Low capital.
The second phase is building the proof case. Launch direct-to-consumer with disciplined unit economics, and pour the founder’s energy into social media rather than paid advertising. The goal is not to build a scaled consumer brand; that is the capital-intensive path you are avoiding. The goal is to generate the data that lets an acquirer model the opportunity across their own distribution. You want to walk into the conversation and say: here is our conversion rate, our repeat purchase rate, our net promoter score, our customer acquisition cost. Extrapolate those across your footprint. Twelve to twenty-four months. Moderate capital.
The third phase is creating competitive tension. You want the natural acquirers to all be aware of the product and aware of each other’s interest. If the founder’s social media has been working, this may already be happening organically. Trade shows and industry press reinforce the signal. If one incumbent approaches, the correct response is to be flattered and unhurried, because the moment a second party enters the conversation, the dynamic transforms from “what is this little company worth?” to “what does it cost us to lose this category to our competitor?”
The founder who executes this well might spend five hundred thousand to one and a half million dollars across the entire journey. That is not a typographical error. The capital efficiency is the point.
Selling access to a market, not a revenue stream
The most common mistake in acquisition negotiations is allowing the conversation to be framed around trailing revenue. A patent commercialisation company will typically have modest direct revenue. They’ll have enough to validate the market, but not enough to justify a large multiple on a conventional basis. If the founder allows the negotiation to be conducted on revenue multiples, they will be underpaid.
The correct framing is entirely different. The founder is not selling a small company. They are selling a right of access to a market the buyer cannot otherwise enter. The total addressable market for this product category is X. The buyer’s existing distribution can capture Y percent of that. The patent prevents them from doing so independently for Z years. What is access to Y percent of X over Z years worth, discounted appropriately? That is the conversation the founder should be engineering from the moment they file the patent.
Three things must be on the table to make this negotiation work:
- credible TAM sizing backed by real sales data rather than a top-down market estimate,
- a patent position that the buyer’s lawyers assess as solid and enforceable, and
- ideally the implicit or explicit presence of an alternative buyer.
When the incumbent stops being polite
There is a moment in the life of many patented consumer products when the category incumbent decides to stop being polite. Sometimes it is an explicit threat: we have the resources to copy your product and bury you in the market. More often it is merely implied. Either way, the underlying calculation is the same: they are betting that you cannot afford to litigate.
Patent litigation in the United States can cost two to five million dollars through trial. In Australia, a typical range is from AU$500,00 to AU$2 million through trial. Most small inventors simply do not have the resources. The rational incumbent looks at a founder with a strong patent and a weak balance sheet and sees an opportunity to take what they want.
Patent enforcement insurance changes this calculus entirely. For a premium that might run fifty to one hundred and fifty thousand dollars annually, the founder gets a policy covering litigation costs. The mere existence of the policy shifts the game theory. The incumbent’s lawyers, who were advising that the founder cannot afford to sue, must now advise that the founder is insured and will almost certainly enforce. Injunctions and damages become real possibilities rather than theoretical ones.
This is also a powerful tool at the negotiation table before any infringement occurs. If an incumbent makes the implied threat, the founder can calmly note that they carry enforcement insurance and would vigorously defend the patent. That converts a bully dynamic into a rational economic discussion, which is precisely the environment in which the founder’s position is strongest. A useful side benefit: the insurer conducts its own assessment of patent strength before writing the policy, so the existence of coverage is itself a third-party signal of IP quality that the acquirer’s due diligence team will note.
The pitch that survives the walk
There is a stretch on my morning walk, somewhere around the six-kilometre mark, after the river and before the second coffee, where the pitch decks from the previous week sort themselves. The ones that survive are the ones where the founder knew the end of the story before they started telling it.
In consumer products, that story ends with an incumbent writing a cheque. Not for what you built, but for what they can now access. The founder’s main skill was inventing the product, and that is exactly as it should be. The mistake is believing that the next step is to build a manufacturing company around it. The right step is to build the leanest possible vehicle to prove the market, protect the IP, tell the story on social media, and make the acquisition inevitable.
Consumer product pitches remain some of the most enjoyable evenings in our angel calendar. The products are tangible, the founders are compelling, and when the structure is right, the returns can be extraordinary. The trick is the structure. A patent, a founder who becomes the product’s best storyteller, a disciplined commercialisation plan, and the clarity to know that the end-game is not a factory with a politician’s ribbon on the door. It’s a phone call from the category incumbent’s head of corporate development.
The founder who understands this spends a fraction of the capital, avoids the manufacturing trap, and arrives at the negotiation table selling access to a market rather than a revenue stream. In my experience, that is the consumer product pitch that deserves the room’s attention and the angel investor’s cheque.
Richard Moore is co-founder of MooCoo Ventures, an angel syndicate that co-invests alongside Brisbane Angels, one of Australia’s most active angel groups. He has made over eighty personal angel investments since 2013.