Loading...
Answers
Menu¿How can an startup without an MVP raise some money to start growing? (it has already be proven in the market with a prototype and results were promis
To be straight foward, the question is how to advance after the research, creating and prototyping. The next steps requiere money and some expertise which are not easy to have nor find
Answers
It is tricky but not possible.
Having been in your situation I can appreciate the challenge that lies ahead.
Investors took for signals to create reassurance and trust, things that are generally tangible like an MVP, initial customers, the first proofs that customers are willing to pay and a problem is actually being solved.
Not having that makes it a magnitude more difficult so having a proxy for those tangible signals will matter most.
For example to make the product more real without a product you may want to create a clickable demo to give investors a feel for the user experience and how it will work.
If you don't have customers yet then maybe you can survey the market and potential customers and reference those that provide good feedback and interest in your deck.
Other positive signals will be useful too.
Very importantly, at an early stage, investors are backing the team even more than the product. Having a solid team with sector experience who have created a startup before and have the experience needed will be very important.
In terms of investors focusing on friends, family and creating an offering that is derisked and maybe has task incentives can help get some initial commitments. Smaller tickets will help.
Also if you have invested your own money and have committed to not taking a salary or taking a greatly reduced salary for an initial period will show investors that you've got skin in the game and you're prepared to lose your own money.
Finally, investors like to see other investors invest, when there is momentum and fear of missing out investors may be more motivated to invest.
Give me a call if you want to discuss further how to create a solid MVP stage fundraising strategy
Good luck!
It is not necessary that you need to own an MVP for funding. You will be surprised to find out that, in fact, an MVP is not just unnecessary, it can also be hindersome when pitching investors.
You can read more here: https://easternpeak.com/blog/do-you-really-need-an-mvp-to-get-funded/
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
I've created a SaaS company and mobile app had the same issue as you. I'm telling you that it's not impossible.
However, what I experienced is that some investors want an MVP and some don't. The most important thing is that you know there is a market out there that is willing to buy your product/service.
So what we did was talk to as many people as possible about our project and created partnerships with large companies who also wanted to be integrated into our platform.
There are websites that you can create an MVP yourself also which you don't need coding experience for such as Bubble.io. Websites like this can help you create at least a demo product that will allow you to show to your investors what your vision is.
If you want to speak further, I'd be happy to setup a call with you.


How have you proven the prototype? Having been in your shoes, if you have any proof that the concept will work - go see potential customers and get them to validate your prototype. Get a deep understanding of the customer pain points, quantify benefits - even if the product is too early to be used commercially. If you demonstrate enough potential to customers - get them to pay for a small trial. Go build the smallest product that solves the biggest pain (focus, focus, focus). Then go find more customers with the same pain and repeat. You'll quickly learn what works and what doesn't. If customers value your product enough to pay to solve their pain point(s) - you may have an investable business. If they don't, you don't. I hope that helps.
_(1).png?1667250277)
_(1).png?1667250277)
You do not need an MVP to raise money at such an early stage, and you do need to raise money from VCs at such a stage (they usually only invest with traction). Here's some tips:
1 - 3 Fs - Family, friends and people with spare money...in
exchange for a bit of equity.
2 - Startup competitions for idea stage, might give you
money and resources.
3 - Gov grants for early stage startups
4 - Business Angels, check for associations on your city
5 - Crowdfunding
Related Questions
-
how to start earning on clarity.fm
Most of the earnings come from the people you are in contact with. The platform is not that big at the moment but it can be earned. My recommendation is to create content on your private page web, facebook, instagram ... and leave a clarity link through your work. If you need extra help call me for 15 minutes.
-
How much equity should I ask as a CMO in a startup?
Greater risk = greater equity. How likely is this to fail or just break even? If you aren't receiving salary yet are among 4-6 non-founders with equivalent sweat investment, all of whom are lower on the totem pole than the two founders, figure out: 1) Taking into account all likely outcomes, what is the most likely outcome in terms of exit? (ex: $10MM.) Keep in mind that 90%+ of all tech startups fail (Allmand Law study), and of those that succeed 88% of M&A deals are under $100MM. Startups that exit at $1B+ are so rare they are called "unicorns"... so don't count on that, no matter how exciting it feels right now. 2) Figure out what 1% equity would give you in terms of payout for the most likely exit. For example, a $10MM exit would give you $100k for every 1% you own. 3) Decide what the chance is that the startup will fail / go bankrupt / get stuck at a $1MM business with no exit in sight. (According to Allman Law's study, 10% stay in business - and far fewer than that actually exit). 4) Multiply the % chance of success by the likely outcome if successful. Now each 1% of equity is worth $10k. You could get lucky and have it be worth millions, or it could be worth nothing. (With the hypothetical numbers I'm giving here, including the odds, you are working for $10k per 1% equity received if the most likely exit is $10MM and the % chance of failure is 90%.) 5) Come up with a vesting path. Commit to one year, get X equity at the end. If you were salaried, the path would be more like 4 years, but since it's free you deserve instant equity as long as you follow through for a reasonable period of time. 6) Assuming you get agreement in writing from the founders, what amount of $ would you take in exchange for 12 months of free work? Now multiply that by 2 to factor in the fact that the payout would be far down the road, and that there is risk. 7) What percentage share of equity would you need in order to equal that payout on exit? 8) Multiply that number by 2-3x to account for likely dilution over time. 9) If the founders aren't willing to give you that much equity in writing, then it's time to move on! If they are, then decide whether you're willing to take the risk in exchange for potentially big rewards (and of course, potentially empty pockets). It's a fascinating topic with a lot of speculation involved, so if you want to discuss in depth, set up a call with me on Clarity. Hope that helps!
-
How has Uber grown so fast?
Obviously, they do the fundamentals well. Good brand. Good experience. Good word of mouth. Good PR. Etc. Etc. But after my interview with Ryan Graves, the head of Global Operations at Uber (https://www.growthhacker.tv/ryan-graves), it became clear that they are operationally advanced and this is a huge part of their success. I'll explain. Uber isn't just a single startup, it's essentially dozens of startups rolled into one because every time they enter a new city they have to establish themselves from essentially nothing (except whatever brand equity has reached the city ahead of them). This means finding/training drivers, marketing to consumers, and building out local staff to manage operations for that city. This is where Ryan Graves comes in. He has a protocol of everything that must be done, and in what order, and by who, to ensure the best chance of success in a new city. So how has Uber grown so fast? Essentially, they figured out how to grow in one locale and were relentless about refining their launch process to recreate that initial success over and over in new cities. No plan works for every city, and they've had to adapt in many situations, but it is still a driving factor for their success.
-
I have this social media idea,but no coding skills. How do I get someone to do the coding (cant afford to pay them) and not give away half of my idea?
Dilip was very kind in his response. My answer might be a bit on the "tough love" side. But that's for you to decide. My intention, just for the record, is to help you (and those like you) on your path to success. And that starts with having a viable philosophy about entrepreneurial-ism and business. And I'm going to answer this because I get asked some form / version of this question very frequently from newcomers to entrepreneurial-ism. The scenario goes something like this: "I have a great idea. It's amazing, I love it, and I just KNOW it's gonna make me a ton of money. But I have no money right now so I can't afford to (fill in the blank with things like "to build it / create it / market it / etc" or "to hire the required staff needed to work in my business to sell it / develop it / etc"). And I don't want to tell anyone about my great idea because I'm worried someone will steal it and make MY million / billion dollars. But I can't afford to legally protect it either... So how do I launch without the skills to personally create the product AND no money to hire anyone else to do that either??" The answer is ... You don't. Look - let's be honest. All you have is an idea. Big deal. Really. I'm not saying it's not a good idea. I'm not saying that if properly executed it couldn't make you a million / billion dollars... But an idea is NOT a business. Nor is it an asset. Until you do some (very important) initial work - like creating a business model, doing customer development, creating a MVP, etc - all you really have is a dream. Right now your choices are: 1. Find someone with the skills or the money to develop your idea and sell them on WHY they should invest in you. And yes, this will mean giving up either a portion of the "ownership" or of future income or equity. And the more risk they have to take - the more equity they will want (and quite frankly be entitled to). 2. Learn how to code and build it yourself. MANY entrepreneurs without financial resources are still resourceful. They develop the skills needed to create what they don't have the money to pay someone else to do. 3. Get some cash so you can pay someone to do the coding. You'll probably have to have some knowledge of coding to direct the architecture of your idea. So you will likely still have to become knowledgeable even if its not you personally doing the coding. (This is not meant to be a comprehensive list of options... And I'm sure some of the other experts here on Clarity have others to add - and I hope they do) To wrap up - Here's my final tip to you that I hope you "get"... It's FAR more valuable to have an idea that a very specific hungry crowd is clamoring for right now - One that THEY would love and pay you for right now - Maybe even one they'd pre-order because they just have to have it - Versus YOU being in love with your own idea. [Notice I didn't say "an idea that some as-of-yet-undetermined market would probably love"] I wish you the best of luck moving forward.
-
What is the average series A funding round at pre revenue valuation for a enterprise start up w/cutting edge tech on verge of our first client.
With all respect to Dan, I'm not seeing anything like that. You said "pre-revenue." If it's pre-revenue and enterprise, you don't have anything proven yet. You would have to have an insanely interesting story with a group of founders and execs on board with ridiculous competitive advantage built in. I have seen a few of those companies. It's more like $3m-$5m pre. Now, post-revenue is different. I've seen enterprise plays with $500k-$1m revenue/yr, still very early (because in the enterprise space that's not a lot of customers yet), getting $8m-$15m post in an A-round. I do agree there's no "average." Finally, you will hit the Series A Crunch issue, which is that for every company like yours with "cutting edge tech" as-yet-unproven, there's 10 which also have cutting edge tech except they have customers, revenue, etc.. So in this case, it's not a matter of valuation, but a matter of getting funded at all!