The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

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

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

waymore

New Contributor
Feb 1, 2018
7
3
13
30
EUROPE
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.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

jesseissorude

Silver Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jun 12, 2014
371
797
304
37
Nashville
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.
 

Supercar

Silver Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Mar 14, 2012
273
506
253
Michigan, Arizona
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.
 

waymore

New Contributor
Feb 1, 2018
7
3
13
30
EUROPE
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.

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?
 

waymore

New Contributor
Feb 1, 2018
7
3
13
30
EUROPE
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.

That's a good idea. What about instead of selling a service or a product before it has been created?
 

maverick

Aspice, officio fungeris sine spe honoris ampliori
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Oct 26, 2012
442
1,095
369
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.
 

ZCP

Legendary Contributor
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Oct 22, 2010
2,871
9,895
2,206
Woodstock, GA
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.
 

Supercar

Silver Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Mar 14, 2012
273
506
253
Michigan, Arizona
That's a good idea. What about instead of selling a service or a product before it has been created?
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.
 

waymore

New Contributor
Feb 1, 2018
7
3
13
30
EUROPE
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.

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.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Supercar

Silver Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Mar 14, 2012
273
506
253
Michigan, Arizona
So do you think Kickstarter would be a good solution?
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?
 

Sponsored Offers

  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
Hey @Lex DeVille ! Having some issues with the NOREGRETS code? Udemy thinks it has expired...
  • Sticky
MARKETPLACE Fox Web School "Legend" Group Coaching Program 2020
@Fox Hi, I learned to code over the last few months, I am not the best but I am getting there, I...
  • Sticky
MARKETPLACE Grow Your Business With a Book (An Unorthodox Marketing Strategy That Built One of the Largest...
Are you looking for a new, lesser-known but potentially very lucrative source of leads to your...
  • Sticky
FEATURED! Introducing... WEALTH EXPO$ED, A Short Story By MJ DeMarco
I read it yesterday, looks like a nice introduction for reading TFM or Unscripted. ; ) Also...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Just got off the phone with @LightHouse. Having just a 45 minute conversation with him has...
  • Sticky
MARKETPLACE Kill Bigger Incubator
@Kak Thanks for the reply. Whats interesting is that I have an idea that's been cooking which...



Forum Sponsor

sponsor

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom