Hi I'm 25 and never been involved in business before. I am a researcher into longevity and digital immortality and I would like to start a company for digital legacies - a kind of "make your own autobiography" software to store people's thoughts and memories online. What realistic progress do I need to have made before I can raise any money towards this project?
In short yes. In medium term, depends. In your case probably not.
Most investors look for viable options that show that you can get real cheap production/sourcing of goods or services offered, actual market reach to capitalize on goods (example could be a stack of POs or preorders, or substantial email requests) and skillful team in place to pull it together. Im an MBA business coach and entrepreneur, I've also invested in a similar startup like the one you mentioned and they failed 2 years into it. Hey lacked one of the 3 I mentioned and just as a bar stool with 3 legs, you need all 3 to have a sustainable business. Savvy investors look for this... They look for your sounded and balanced approach, realistic forecasts, actionable plans, actions to date, financials, team and your leadership... But none the less i think all investors are also driven by their emotions- how good of a pitch man are you? How can you connect them to your product idea? Etc.. Etc... As you can see the more you dig into getting investors but depending on how you present the 3, to the right investor for your idea, the idea might be enough to give you a try.
I would suggest to not waste your time pitching and burning bridges until you have a prototype, but I wont! I will instead tell you to go research your area, pitch your idea to valuable people who could help you implement something rough, create a landing page to capture emails, create social accounts and promote the idea there, it's values, etc. garner a community... Then once you have a community of supporters of your "what if" go get yourself a Kickstarter campaign going... And promote it through your community. Ask for support... Get some funding.. Then if that's not enough.. Go look for relevant business individuals who would be interested and could invest. Convince by showing off your community size, campaign support, effort, and your drive to do and maybe then you can get investors without an actual product. :)
Demonstrable proof that a market exists for this service; that people are willing to profitably pay for it.
How you do it, without having anything but 'vaporware', is you sell the initial round at a discount. These are your beta testers and in return for having the app customized to their preferences (because they will be the ones giving you feedback) and their testimonials, they get the lower price.
With orders in hand, you can then go look for funding.
Until that point, all you have is an idea. And ideas are a dime a dozen. People THINK their baby (idea) is valuable, but execution is what makes an idea valuable. By itself, without any market validity, it's pretty worthless.
Absolutely not possible.
The only stories you have ever heard about a "paper idea" getting funded were stories where the founder had already made millions of $ for investors, and/or invested their own money.
There are literally thousands of startups trying to do things very similar to what you describe, and the only way to raise capital is to prove substantial traction (say, 100k paying users or 1M free).
With all due respect to the other folks who answered this question, in my experience it's totally unseasonal to suggest that a well-written business plan for such a startup would raise investment capital, except perhaps from a totally uninformed novice investor. It's about progress and proof, not about a pitch.
If you can make a product which users are prepared to pay for - even in a basic 'minimum viable product (MVP)' sense, then you can 'bootstrap' your way to profitability. Not having money up-front is actually a positive. You focus, laser-like, on building something of value that users are prepared to pay for. Then, with a working product and business model you'll find it much, much easier to raise money - and at a decent valuation. If you'd like to read more, Paul Graham or the guys at 37signals have written plenty online about starting up in this way. Happy to talk on a call if you're interested in learning more on this approach.
I've started my first business with £1,000 and bootstrapped my second tech startup up to proof of concept ahead of raising investment.
I agree with the advice you received; the amount of great business cases that come across investors desks these days will make it difficult for you idea to make it past the post box; but you never know. Sometime, it is simply a case of finding the right person at just the right time. The best thing you can do is take you idea as far as you can yourself and network like a ninja.
If you told us where you are in the world, we could possibly give you some additional practical advice.
For instance, I started my businesses in the UK and there are many other routes available to fund your startup and get a few accolades before approaching investors. Look at government backed startup loans and government grants.