I only have a few thousand dollars available. I know I can make a good working prototype for that much. The problem is I need realistically around 100k to get the initial design completed for real manufacturing plus maybe another 25k-50k to make the first “batch” of my product.
Is it realistic to even try getting an investor for that much off just a prototype?
It is called a Pre-Seed investment and it happens very often. However you need to win the trust of the potential investor. This is done by validating and forecasting your solution (as mentioned before). Previous working expiriens, learned skills, deeper market understanding and so will also add to the trust an investor will have.
Its all about convincing the investor. I think an angle investor is the most likely to invest. Funds will expect more quantitative data and results.
Don’t waste time making a prototype if you haven’t clearly defined and tested your target market . You can have the greatest prototype in the world but if no one wants it (and you need data to support this) an investor won’t budge. Build a MVP - something that outlines to the customer how the product would work and tune and iterate that until you find your target market. Especially in hard tech you will spend months maybe even years ironing out the kinks in your design. Do it right and make sure you spend that time on something you have data will sell. Investors will appreciate that approach much more, trust me.
The entire business model of Venture Capital funds is investing in early-stage companies. They exchange their cash for equity in your company, even though your company may be nothing more than an idea.
Y Combinator is one of the country’s most renowned startup accelerators, and there are multiple cases of it investing in companies with no revenue and no products.
The application process is competitive, but some founders have received funding after nothing more than a 15-minute coffee chat.
Accelerators are different than most vc funding. For most vc funding, you need a million in annual sales. Yc will invest in ideas though.
Sounds like a crowdfunding opportunity.
I got an investor off a product mockup I made in PowerPoint. It doesn’t need to be super sophisticated, you just need to be able to inspire people with your plan.
I’d say yea but you’re alot more likely to get that same investor if you focus on building up a big waitlist and interest alongside the prototype.
I would like to see something working if I’, going to pay atleast to know you can do whatever you say. Show me what it will be, and what it is now
Investment will come from demand. You need to have an airtight story for this demand.
You need a crisp business plan how the funds you get will be spent and the checkpoints you will use to measure your success along the way.
Ideas are cheap, so prove you’ll have paying customers and what your margins will look like. Since you don’t have the funds to build a prototype, you can try to get some friends and family funding to help you. However, you still won’t get any serious capital without that proof.
Just think of the fastest and cheapest way to get that proof and only build the prototype if that’s literally the only way to get that proof. Otherwise find other clever ways.
Good luck!