How to raise money without a product
The beginnings of any startup are the toughest. You have no product and yet you still need investment.
Naturally, it’s easy to become miserable and believe that it just isn’t possible to raise the required funds unless you’ve got a product. Logically, you think investors want to see a product. But this isn’t the case. Putting together a product before looking for investment can often be a waste of time. After all, what if the investors decide they want you to tweak the product before they invest? This could cost you more money and more time. Instead, as long as you have a few basic essentials nailed, investors will be ready to talk.
Let’s take a look at how to raise money without a product:
Assemble The Perfect Team
There is a phrase that abounds in the investment world: “We don’t bet on the horse, we bet on the jockey.”
This essentially means that investors aren’t necessarily looking at that killer product – they’re looking at the guys behind the killer product. An excellent team that investors can trust to go on and make this work is what they want to see. They want to be impressed by your ideas, your leadership, and the way you work together as a unit to deliver results.
You’ve got a vision, and now you need to demonstrate why you are the right team to execute that vision. Get the team right and you can bet your bottom dollar that you’ll have a much better chance or raising money without a product.
Make A Demo
Okay, so you haven’t got a product yet but you’ve got a demo, right? Because if you don’t have a product, you absolutely must at least have a demo of sorts. Investors don’t want you to simply sell them a dream – they do want to see something.
Demos sell your idea to investors and they can encourage a significant amount of investment. If your product is going to be an app, create a cheap, quick prototype that shows in a nutshell what the app will do.
You’re raising money without a product, so you need to be able to validate any market that you’re looking at. Without a proven validated market, why would any investor worth their salt be interested in your product?
To test whether there is demand in the marketplace, you can create a landing page to build up interest. You can also maximise the potential of social media as a way to see whether people are interested in your product.
Even if few people seem interested, you can ask for feedback to find out why they’re not interested, as well as what changes they would like to see to the product. You can then tweak the product so that it satisfies more people. We call this technique validated learning, a technique made famous by Eric Ries with his book The Lean Startup. By carrying out validated learning, you’ll be tweaking your idea until eventually it satisfies a market demand.
At the end of the day, investors don’t necessarily expect you to go to them with the finished product. They know this is often just a waste of your time and money. Instead, they just want to see the essentials – a great team, a good demo, and validation.
The team at Easy Consulting are the ones who can help lift any idea off the ground, and get it noticed. We can create your dream website, and have Google talking to it in no time. We also specialise in social media marketing and SEO, which is a must for any website to stand out amongst all the others out there. Call us today on 0421 905 000 and let’s discuss how we can help you and your dream!