Now, Give Me the $$$ Funding
Everyday I’m approached by enthusiastic aspiring entrepreneurs who want to talk about an idea that’s either going to change the world, make a bucket load of cash, or both. More often than not, most of these business ideas seem viable and have an opportunity to succeed. The biggest challenge is helping these would-be entrepreneurs walk through the steps from idea to funding. I commonly hear a variation of this theme, “I have a great idea and I just need $100,000 to make it happen…” Remember, it’s not an immediate leap to funding as many newbies might think.
Before anyone is going to invest in your idea, you must prove- or attempt to prove that your product has legs by creating a prototype. With this sample of your product, you can now demonstrate that there might be merit, which could help you with getting the funding that you need. However, even building the prototype is going to require some funding. This has to come from you. If you can’t scrape together enough cash, they you have to reconsider if entrepreneurship is right for you at this time. It’s rare that someone will invest in an idea---if it happens, it’s only for experienced and proven folks. This leads me to the other big factor that investors consider: the management team. Do you and your team have what it takes to execute? Make sure that your team has the right players to develop, launch and build your business at this stage of the lifecycle.
I’ve always bootstrapped my businesses in their initial stages before going out for investors’ money. By doing so, I achieved three things:
Demonstrated that my product had legs
Had skin in the game since I invested my money in developing the idea
- Assembled a management team with the experience to execute
While there are no guarantees for success, these factors help to reduce some of the perceived risk associated with a startup in investors’ eyes. You’ll be able to attract investment more easily if you can show that you’ve done your legwork and brought together the resources at this stage.