Have you ever watched an infomercial or seen an item in a department store and thought "I could have thought of that!" Have you wished you had invested money early in a blockbuster invention? Learn the stories behind some (seemingly) ridiculous ideas that have made inventors and investors very wealthy, and find out what you, as a potential investor, should look for and consider before putting up capital for a potential funding opportunity.

The Koosh Ball
You've may have never heard of Scott Stillinger but somewhere in your home or office you probably have one of his inventions – the Koosh ball, which made millions of dollars. Stillinger came up with the idea for the Koosh ball when he tied rubber bands together to create a smaller, easier-to-catch ball for his young children in 1987. He founded OddzOn Products Inc. to distribute the small, simple toy, and within just 12 months it was flying off of store shelves as that year's hottest Christmas gift.

The company expanded, and in 1994 Stillinger sold OddzOn to toy manufacturer Russ Berrie and Company Inc., which in turn was bought by toy behemoth Hasbro (NYSE:HAS) in 1997 for more $100 million. And it all happened a mere 10 years after the first ball was created. (For more on mergers and acquisitions, read our tutorial: Mergers and Acquisitions.)

Santa Mail
Every year, millions of children around the globe pen letters to Santa and hope for a response. Byron Reese realized the potential in this market. In 2002, he launched "Santa Mail," a service that allows kids to send letters to the North Pole. Parents enclose a small fee of just $9.95, and little Johnny or Jane receives a personalized letter back from the "big man" himself. By 2009, Santa Mail had responded to nearly 300,000 children. At close to $10 a letter, well, you can do the math - needless to say, it was a little idea that has earned Reese a big return. (Get some tips on how to come up with your own winning business idea. See 10 Breakout Ideas For Small Businesses.)

Lucky Break Wishbones
Are you still a little bitter that, at last year's Thanksgiving dinner, you lost out to your cousin Ned in the annual fight over the lone turkey wishbone? Well, thanks to Ken Ahroni, those days are long over. In 1999, he had something of an epiphany at his family's Thanksgiving dinner table: a family with multiple people would like multiple wishbones. He shuttered his previous consulting business and launched Lucky Break Wishbone Corp. in 2004, in order to sell his one-of-a-kind breakable plastic wishbones. Within two years, the company was generating nearly $1 million in sales through distributors in more than 40 states nationwide. (For more on Thanksgiving expenses, read Keep Thanksgiving Costs From Taking A Fowl Turn.)

Antenna Balls
You've seen them; maybe you even sport one on your car. Those ubiquitous, yellow smiley-faced balls perched atop antennas in parking lots nationwide have made Jason Wall a very wealthy man. Inspired in 1997 by a commercial for the fast food chain Jack in the Box, Wall created some antenna ball designs and began selling them locally through auto stores in California in 1998. Within a year, he had earned more than $1.15 million in sales and quickly won major accounts to sell his product through national chains, including Wal-Mart (NYSE:WMT).In 2009, the multimillionaire is president and CEO of In-Concept Inc.

Investing in Far-Out Ideas and Inventions
If you can't come up with your own idea - or don't want to put in the time - you can always invest in another inventor's ingenuity. Inventions can come from anywhere and anyone - friends, family members or even coworkers. But before you start writing checks out to just anyone who promises they have "the next BIG idea," there are five key tips to consider:

  1. Learn about the industry. If you don't personally know a potential investor in whom to invest, you can learn more about opportunities through industry trade magazines, like Investor's Digest or America's Inventor Magazine, or through organizations like the National Congress of Investor Organizations. (To learn more about specific industries check out our Industry Handbook.)
  2. Stick to your strengths. Investing in an invention is a risky proposition. That's why it's a good idea to stick to investigating investment opportunities in a field or concept with which you are somewhat familiar. For example, if you are a mother of young children, you will have a keener sense of the needs of children and parents than someone without children. Use your background, interests and experience to your advantage when evaluating investment opportunities.
  3. Find the right people to back. Sure, your uncle Frank may be utterly convinced that his remote-controlled backyard squirrel zapper is what every home needs, but that shouldn't be enough to get you to open your wallet. Instead, look for inventors who have demonstrated success - people who have multiple patents and success in selling their inventions, either directly to retailers or to larger companies. Successful inventors have the proven ability to secure patents and sell products. (For more on patents, see Patents Are Assets, So Learn How To Value Them.)

  4. Get to know the market and the team. All successful investors research the product and company they're going to help fund first. Do some homework to get to know not only the inventor you are considering backing, but also the market potential for the product and its profitability and evaluate the team the inventor has assembled to bring the product to market. Ask key questions such as:

    What need does the invention satisfy?
    Are there competitors?
    Have similar types of inventions failed in the recent past?
    What is the inventor's time line to get to market?
    What is his or her business and marketing plan to not only sell products but realize a healthy profit margin?
    Are there any other potential patents pending on a similar type of product?
    It takes a team of skilled professionals with the right product working in the right market to make your investment realize its potential.
  5. Do your financial and legal due diligence. As with any investment, make sure that you know exactly what you're investing in up front. Does the person or organization seeking funding have a sound business plan? What is the current financial status and are there any other debt obligations to which you, as an investor, could be exposed? Are there any other funders, and if so, who are they? Ask for all financial records, business plans and projections; carefully review any documents you're asked to sign; seek professional legal and financial counsel, and be sure you understand any potential risk that you're incurring, including the risk of losing of your investment altogether. (For more information on doing research before investing, take a look at our article Due Diligence In 10 Easy Steps.)

The Bottom Line
Realistically, the odds are stacked against most investors looking to make their fortune by backing an inventor. The U.S. Patent Office notes that, "approximately 2% of patents earn significant dollars for their investors." Still, there are future Koosh balls and Lucky Break Wishbones to be made and profited from. Perhaps with some hard work and careful investing, you too could find a ridiculous idea that gets you laughing all the way to the bank.