Product is my comfort zone. So believe me, I have been there. Afraid to pitch without more to show. Afraid to put forth product demos that are glorified mockups without a real backend.
“Your idea is phenomenal and you’re good at pitching, but because you don’t have a complete product yet I’m never speaking with you again.” — said no one ever.
Recently I had a number of friends tell me that they want to raise their first money, but they’re not pitching until after they have a fully functional product. Some reasons I hear are
“If I wait till after I have a product I’ll get a better valuation”
This is not a healthy way to think about your first pitch. If your company fails, this valuation does not matter. If you somehow score a huge investment on your first ever pitch and build a massively successful company, you’re not going to care too much about the difference in 15% vs 15.5% ownership of a billion dollar company.
“If I can show a product it will improve my chances of funding”
There is a lot of advice from investors targeted at first time entrepreneurs that agrees with this sentiment. This isn’t surprising because investors constantly get bombarded with half-baked ideas without good plans, and it’s an easy way for them to filter.
Let’s assume (naively) 2 basic requirements for an investor to say “yes”:
The real reason why investors ask you to bring them products is either as a proxy for credibility, to deter people who aren’t serious, or because they just don’t want to tell you that your idea is bad.
You don’t need to have a fully functional product to prove execution credibility.
In fact, putting an unpolished product in front of an investor may backfire. Worse, it can actually distract them from thinking about the 5–10 year vision for your company. You’re better off using a polished mockups and engaging their imagination.
If you can make a halfway decent case for how the system would work and why you have the ability to execute, you can start getting feedback about the more important challenge, which is identifying the right opportunity, and building the right team to solve it.
You can (and probably should) start pitching informally just based on #1 to people who are investors by trade, because then you’ll get better at pitching, and smart people will still have good feedback about your idea.
If you have all your ducks in a row except for having a complete product, getting feedback from potential investors has very little downside. But it does have a lot of upside, learning, and time savings. Good investors often want to help you get a “yes” from them, because it’s in their long term interest to help create more fundable companies by building early relationships.
If you want to make progress by improving your vision, credibility, and pitchmanship (that should really be a word), don’t fear the pitch. Get out there right now.
Hacker Noon is how hackers start their afternoons. We’re a part of the @AMIfamily. We are now accepting submissions and happy to discuss advertising &sponsorship opportunities.
To learn more, read our about page, like/message us on Facebook, or simply, tweet/DM @HackerNoon.
If you enjoyed this story, we recommend reading our latest tech stories and trending tech stories. Until next time, don’t take the realities of the world for granted!
Create your free account to unlock your custom reading experience.