Venture Capitalist or Angel?How does this work?

[Ronnie Bryan]

I am writing this post because, people scream investor as if getting one to support your idea is as easy as grocery shopping.

I don't know any investor who drops money on just a thought.Where is your prototype?Are you already earning money on your idea? Wade 1 million, mentioned some questions that an investor might also ask.

My research into investors' also taught me, they expect more control, they would want 65-70% ownership I know at least for businesses. I am not sure how they work on products.

I hired Davison, to build the prototype, and only paid them a portion of what they are asking for. Without the prototype where I can even show the investor what it will look like in stores.They will laugh at me and send me packing.

Maybe, some people in this forums dealt with investors, or are investors themselves, and can shed more light on the topic

 

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[Ronnie Bryan]

I could I guess, hire an designer and have an scaled drawing that would count as an prototype?

 

[a k a]

Read this thread by @IceCreamKid
https://www.thefastlaneforum.com/co...-money-no-idea-no-education-no-problem.52285/

 

[Tyler Ellison]

Have you considered crowdfunding? Kickstarter is the best friend of lean startups in today's digital age. It's not 'easy' to get a lot of funding but if you use some good salesmanship in writing the pitch and there's real interest in your idea, you get not just funding but also validation from the market.

 

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[Sovereign]

I pondered about this topic as well.


As far as i've been told and as far as i've gathered so far VCs and the like don’t require full prototypes (after all it’s impossible to make a luxury car without first receiving funding), but rather a proof of concept – validation of operation.
This means verifying financial, manufacturing and operational aspects of your idea.

Financial aspects can be done through statistics and statistical research.

Manufacturing aspects can be covered through getting quotes from 2 to 3 possible manufacturers. As I understand just getting a quote is sketchy and you should get offers for actual contracts.

Operational aspects are covered by physical tests, if that is too expensive you can cover it by physical/mathematical calculations, simulations or even extrapolations.
But I wouldn’t consider the latter to be satisfactory as they don’t give a strong enough proof, thus your bargaining point is weak.

You must definitely have at least 3-D photorealistic renderings from several angles, even better is a 360° animation.
As I understand psychology, it is very beneficial to have a physical model which they can touch with you, even if it’s not a working prototype.


70% ownership?!
As I understood 20% is a standard for the first round. Can anyone tell us where this discrepancy originates?

Ok, I could understand such numbers (even up to 90% ownership) if you aren’t bringing to the table anything but the idea. But if you have worked on your idea for years and have verified all aspects of it, then anything above 40% is simply unacceptable, especially if you bring a fully tested and fully working prototype to the table.



If you need CAD drawings and 3-D CAD models, contact me.
I can also do renderings and animations (a natural step after 3-D CAD model), they aren’t world class, but I can make you a sample.