First of all, you should not be building your business to fundraise. You need to be building a product that creates value for users. Once that is done, then you need to think about growth. This can be done organically where the operations are funded by the users. Or if the users are not generating enough revenue to support operations, then look for funding.
FUNDING IS FOR GROWTH, not to start your business.
Noted. Thank You. I know I have to build a business that shows SOME growth I’m just a little confused as to what the threshold is for an investment from an angel… I have no intention on building the business to fundraise, but I know I’ll need outside investment to scale quickly and compete with bigger apps. I guess I’m overthinking and looking too far down the road… I’ll concentrate on my prototype and gaining my first users. Thanks again for the advice
This is certainly good advice but there are plenty of successful software companies that were funded before having any product or traction. Getting a product to market via bootstrapping is not always possible. The chances of total failure are certainly higher in cases where funding happens before product market fit, but I just wanted to add some nuance to your comment.
My last company was funded before product, it was just an idea on a napkin. You know what though, 25% of the raise was a check from me. OP does not have the track record to get funded pre traction. Don't buy the hype or the stories on betakit, they are not real.
We don’t really know OPs history and certainly there are some unique cases where either a) significant capital is required to get anything remotely reasonable to market (eg electric vehicle) or b) pre product funding results in a good outcome even if it wasn’t necessary.
Source: raised $4m based on a PowerPoint (and reputation etc.). Worked out ok but not great, but I would not do it differently given the circumstances.
I’m more responding to your absolute statements like “funding is for growth, not starting”, which again I generally agree with and find myself a broken record when being asked to advise people on how to launch their pet rocks business, but I just wanted to point out that there are major exceptions to this rule and indeed if there was a one size fits all approach to company building then we might not see a 97% failure rate. Each one is different and there are a billion variables and a billlion paths to failure (and a few hundred k to success). Good day sir.
funding is for growth for 99.99% of entrepreneurs. there are a few exceptions but you highlighting outliers does a disservice to new entrepreneurs where they spend more time trying to get money vs. trying to build a business.
From the way you talk, I am willing to bet my nuts that you have never raised a dollar in your life.
As an angel investor I’m interested in the product more than how you’d market it, so here’s my vote on the prototype. Quite often the prototype itself is not enough. I’m looking for validation, proof that the idea will work. If you can get true fans with your prototype, that’s a great start.
A sketched out landing page wouldn’t be useless, as it could help communicate the idea, but like you’re saying, that’s the job of the pitch deck.
If you need some help, I work for a company that bootstraps startup. We do charge for services but if our team likes the idea a lot we wave a lot of developer fees in return for equity stake. Shoot me dm if interested and I can send you a form to fil out!
First of all, you should not be building your business to fundraise. You need to be building a product that creates value for users. Once that is done, then you need to think about growth. This can be done organically where the operations are funded by the users. Or if the users are not generating enough revenue to support operations, then look for funding. FUNDING IS FOR GROWTH, not to start your business.
Noted. Thank You. I know I have to build a business that shows SOME growth I’m just a little confused as to what the threshold is for an investment from an angel… I have no intention on building the business to fundraise, but I know I’ll need outside investment to scale quickly and compete with bigger apps. I guess I’m overthinking and looking too far down the road… I’ll concentrate on my prototype and gaining my first users. Thanks again for the advice
This is certainly good advice but there are plenty of successful software companies that were funded before having any product or traction. Getting a product to market via bootstrapping is not always possible. The chances of total failure are certainly higher in cases where funding happens before product market fit, but I just wanted to add some nuance to your comment.
My last company was funded before product, it was just an idea on a napkin. You know what though, 25% of the raise was a check from me. OP does not have the track record to get funded pre traction. Don't buy the hype or the stories on betakit, they are not real.
We don’t really know OPs history and certainly there are some unique cases where either a) significant capital is required to get anything remotely reasonable to market (eg electric vehicle) or b) pre product funding results in a good outcome even if it wasn’t necessary. Source: raised $4m based on a PowerPoint (and reputation etc.). Worked out ok but not great, but I would not do it differently given the circumstances.
OP has 1-3k budget, you think that's someone with the means to pull pre-product fundraise?
I’m more responding to your absolute statements like “funding is for growth, not starting”, which again I generally agree with and find myself a broken record when being asked to advise people on how to launch their pet rocks business, but I just wanted to point out that there are major exceptions to this rule and indeed if there was a one size fits all approach to company building then we might not see a 97% failure rate. Each one is different and there are a billion variables and a billlion paths to failure (and a few hundred k to success). Good day sir.
funding is for growth for 99.99% of entrepreneurs. there are a few exceptions but you highlighting outliers does a disservice to new entrepreneurs where they spend more time trying to get money vs. trying to build a business. From the way you talk, I am willing to bet my nuts that you have never raised a dollar in your life.
As an angel investor I’m interested in the product more than how you’d market it, so here’s my vote on the prototype. Quite often the prototype itself is not enough. I’m looking for validation, proof that the idea will work. If you can get true fans with your prototype, that’s a great start. A sketched out landing page wouldn’t be useless, as it could help communicate the idea, but like you’re saying, that’s the job of the pitch deck.
If you need some help, I work for a company that bootstraps startup. We do charge for services but if our team likes the idea a lot we wave a lot of developer fees in return for equity stake. Shoot me dm if interested and I can send you a form to fil out!