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angel investing: How to raise money for a hardware startup that needs money upfront to even produce a prototype?
TM
TM
Tamer Maher, CTO / COO- M&A Business Consultant MBA & PMP answered:

HI...

In your case, banks may be a difficult option. May be in the future you start thinking of banks to redesign the company equity / debt leverage ratios. But not now...

To raise the fund you have some few options..

Venture capitals / private equity is your main target of course. Those who want a customer base will be avoided.

Having it really dififcult to convince these people is something normal, but also, consider you may be doing something wrong, or incomplete. Regarding the feasibility study or the business model. You need to review that..

Why can't you have a proof of concept ? or a prototype ? How much do you need ? How much would it cost ?

what about the tech labs in the university ? The schools of engineering may have some fund. Actually lots do to fund research and small projects. You may also find some other students that can help you build it for a share ..

Go to one of the factories, but make sure you speak directly to one of the board members , CEO , head of engineering or research.. Lots of companies support intrepreneurship. They can then hire you and fund your project as a subsidiary of their company.. That's another option.

Some famous funding alternatives can be intel capital (http://www.intelcapital.com ) , or Bill and Melinda Gates Foundation ( http://www.gatesfoundation.org ) . You may be able to have a grant from this foundation if you have a cause, like the water issue you mentioned. (still your idea is not clear to me )

If you go to angel investors, or some platform like angel.co , you can post a job asking for a partner to raise money for the project.

I will also not mind sending proposals to big banks outside your country. If the project is profitable they will fund it.

and ...

It is always tough in the beginning. Never loose the spirit.

Good Luck!

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