đź’¸ When is a product/maker ready to raise money?
At what point does a product become ready to talk to investors?
When you have users?
Revenue?
A clear business model?
A certain number of people using it?
Especially for solo or small-team makers, it feels twice as hard to reach all of these points alone - while continuing to build the product without income and bootstrapping everything.
At some point, it starts to feel like an infinite loop:
build, try to get revenue, shape the business model, build more, marketing, try to get revenue… =D
So when do you actually say, okay, now we’re ready to raise?
I’d really love to hear from people who have experience with VCs or other investors:
What steps should be done before approaching investors?
Where would you suggest applying?
What makes a product / maker ready for investment?
Would love to hear personal opinions and real experiences.
Replies
I don't think there is a single readiness checklist because different investors are looking for different signals. I think investors aren't checking boxes like 'do they have 1000 users or 10,000 dollars a month revenue. I believe if I were an investor the most important question is this " is this product or service going to keep growing without needing me to save it or pump more money into it". So I think you can start talking to investors no matter the stage of your product or service.
@richatsealedvault Liked your pov. What do you think is the best way to contact investors?
@adana Well , I don't have the template for the best way to contact a potential investors. I believe between direct cold outreach/email and network contact one of these will work out. The main issue is that for most solo founders cold outreach is often the only available way to reach investors.
@richatsealedvault Thanks for sharing your opinion!
I've raised a few times and raising again now, what I notice is that the bar has moved a lot in the past 9 months.
It used to be that having a product, a good team, a clear vision and some traction were more than enough.
What I am noticing now is that you need users using the product every day or a provable way to get paying customers, even for a pre-seed.
So, now more than ever, focussing on getting users to use the product is my main focus, nothing else has as big an impact on investors.
You have to see it like this, they don't care what you do in the end, they just want a magic box where they put money in and more money comes out, the more you can convince them you have such a box, the more likely they will invest.
There's always one more milestone that feels like it'd make the pitch stronger.
What I've noticed is investors don't actually want perfection, they want a trend line. A little bit of traction that's clearly moving up beats a bigger number that's flat. So instead of "am I ready," maybe the better question is "do I have 2-3 months of data showing direction, even if the numbers are small."
Also, talking to investors early, even before you're "ready," isn't wasted. Half of fundraising is just relationship-building over time.
@aruna_polosofttech Thanks for your comment!
Have you had experience with this yourself, or are you still planning to?
I ll say when you have validated the PMF from a good sample of people you dont know. Early checks but not necessary big are good indication that your product has an audience with feedback and willing to pay for it.
@dimneo Yes, PMF validation is a strong signal, ig. Do you have any experience with all this?
@adana I do! the Lean Startup by Eric Reis is the bible for me. Build fast, with bugs is fine as long as the main premise is visible. Engage with local communities , pitch competitions, startup meetups, and collect feedback.
@dimneo Thanks for mentioning The Lean Startup - I’ll look into it a bit more.
Thank you for asking this question I've learned a lot from the answers! Super new here, finding my way.
I am treating investment as a rocket fuel. If my product is ready to be multiplied if some money comes that means that we are ready. Money from the investment should mean something for the product