Before you can raise investor funding, you’ll have to prove you have a business.
I’m assuming you’ve taken the first step of proving product-market fit by testing your assumptions. (You have done that – right?)
But to really prove that the business model works, you’ll likely need to build a prototype and test it with customers. By doing that, you prove that you can make the technology work, and you prove that it does solve a customer problem. That goes a long way toward reducing risk from an investor’s point of view (see “What Investors Want”).
Better yet – if you have paying customers, you’ve proven that customers agree that your solution has value.
That’s the kind of proof you’ll need to get investors interested. And that’s why you need to utilize those bootstrapping funding strategies we talked about earlier – before you pitch investors. That’s how you fund your company up to this point – where you’ve proven you have a business.
- Prototype your solution
- Test it with customers
- And start selling to get revenue!
That’s how you prove your business. Do that before you ask for investment.
And remember to Develop Customers in parallel with developing your product. Don’t leave customers out of the equation! You should start talking with customers right up front when you Test your Assumptions – and keep testing assumptions with customers right up to (and beyond!) product launch!