If you’re able to convince someone to invest in you when you have no product, no customers, and $0 in revenue, then you’ve given yourself an opportunity to validate the idea that you’ve always dreamt of launching. Your first round of funding is critical to your success as it’s your first step from 0 to 1.
Before you approach investors, focus on these two things:
- Make sure you’re 110% ready.
- Attack something sizeable.
You need to present yourself as the best person possible to execute this idea. You need to be passionate and give off an energy that shows you know this better than anyone else. This is so important in the beginning. Every investor wants to invest in winners.
You can do this by spending time with the problem you want to solve. An easy approach is talking to as many people as you can. Aim for meeting at least 50 people in the market you’re addressing. Ask questions like: “tell me about your problems related to this market”, “how do you currently solve them? Can you think of a better way?”. Pitch them your problem statement and your assumption on how you intend to solve it. Do they agree or disagree with your assumption? Ask for open and honest feedback. This will help you find edge cases that you haven’t thought of. You’ll notice your pitch starts to get refined, and very quickly you’ll have answers to most questions.
You’ll also need to have a clear roadmap. The roadmap will change for sure, but in the beginning, having an idea of how it all works is critical. Create a small pitch deck to help focus on creating a compelling story. Here’s a document that’ll help you think about all the components you’ll need to know.
Once the pitch is clear and you think you’ve addressed all possible edge cases, then you’re ready!
The other critical component is a sexy market size. If you’re building a booking app – how many bookings are currently generated on a monthly basis? Try to find GMV (Gross Merchandise Value), annual spend, annual transaction numbers, etc. If you can prove your idea is scalable, then investors are going to listen to you.
Also, don’t ask your parents, friend or loved ones (FFF) for money. That doesn’t justify your problem statement and solution. Ask someone you don’t know for the money. A VC would be amazing, so will an Angel that has invested in several other startups this early.
Good luck! Feel free to reach out to me if you have any questions on firstname.lastname@example.org.