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Have a Prototype Ready, how to Get Money to Fund it?

Discussion in 'General Entrepreneur Discussion' started by waymore, Feb 7, 2018.

  1. waymore
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    waymore New Contributor

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    Hi guys I'm working day and night on my tech startup project and with my team we've finished the prototype.
    I'd like to present to investors and get money for funding but I know it's not easy.

    I'm currently in USA and I'm travelling to San Francisco, also I've been to Los Angeles and I'm meeting lots of entrepreneurs while adding them all to my contact list.
    I'm also trying to get some meetings with Angel investors here, I just write them a short message on LinkedIn but still got no response.

    How can I follow up in the right way without claiming money but just showing to an entrepreneur or investors my prototype so they can understand they can make money with my service and actually have a great return on investment?

    Thanks for your support guys.
     
  2. ZCP
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    ZCP Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    How many have you sold?
     
  3. jesseissorude
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    jesseissorude Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Hola! I do physical products too and ran into the same problem. "Design is [close to] done... now how do I do a production run without capital?!"

    Sounds like a blowoff, but ZCP is on the right track. Sell a handful of these suckers! If you can ship a minimum-viable version of this product at a small discount, go for it. People actually _like_ getting the experimental prototype versions.

    And have you thought about wholesale? My first big sale was from a shitty pen-to-paper drawing I made of the widget I was funding. I got a couple stores on board and told them "Great, delivery will be in 90 days". They don't mind waiting if you are solving a good problem for them, and if you are completely open and honest about needing capital to fund the first run. Stores f*cking LOVE being the first person to be able to stock something new.

    Worst case scenario, you refund all their money. NBD.

    Grow using your customers' money, not your own. Do pre-sales, sell MVP versions, and remember to get feedback from customers every step of the way.

    Personally, I wouldn't take money from an investor if I can help it. I don't want another boss.

    You may have a weird situation that requires an injection of $1million to get up and running, but I honestly doubt it. Plus, if you fund your first production run with pre-sales and are already turning profit, it'll be 100x easier to get investors onboard anyway.
     
  4. Supercar
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    Supercar Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I would love to have a problem manufacturing something that sells well and makes a good profit. You first spend a few grand of your own money to make prototypes and the first batch for sale. Then, if the product sells, you re-invest the profits and/or borrow from credit cards, banks, customers, distributors, or investors to make more. Then repeat.
     
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  5. waymore
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    waymore New Contributor

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    I've got some early adopters but they just gave me a feedback for free for now.
     
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  6. waymore
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    waymore New Contributor

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    I'm selling a service, what about crowfunding on kick starter? is it really good in the long run? or is it better to get private investments?
     
  7. waymore
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    waymore New Contributor

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    That's a good idea. What about instead of selling a service or a product before it has been created?
     
  8. maverick
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    maverick Unorthodox Nonconformist Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Now more than ever ever, investors are searching for startups that have proven the ability to find customers. The years of getting easy seed funding are pretty much over.

    In order words: show some kind of working business model and you will be able to get funding. Just showing potential isn't worth it anymore.
     
  9. ZCP
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    ZCP Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    So if I show up at your door with no sales and no track record, how much would you like to invest?

    Purchase orders, customer lists, etc. move the needle. Here is the prototype of our 'improved' product with 1 year of field sales and testing... really moves the needle.

    The Southpark version of a startup getting a bunch of money for doing nothing is funny, just not realistic.

    What is your USP? What is your IP? What are your current and 1st year sales? That will give you a lot more traction and leverage when putting term sheets together.
     
  10. Supercar
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    Supercar Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Totally possible, if you have a credibility with your customers, and if they know you. Elon Musk just sold a few hundred of Tesla roadsters for $250K each after hand-building just a handful of prototypes. Same with $5M worth of his stupid flamethrowers, which he hasn't produced or shipped.

    There is also the Kickstarter website for those who do not know their customers.
     
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  11. waymore
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    waymore New Contributor

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    So do you think Kickstarter would be a good solution?

    I've talked to venture capitalists and they have strict rules, I see crowfunding could be a way for starting to get early adopters and money or I'm wrong?

    Thank you.
     
  12. Supercar
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    Supercar Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I can't tell because I do not now what your product is.

    You haven't told us what you've created, but you are going to tell Kickstarter and the whole world first?
     
    1step likes this.

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