“The great majority of men are bundles of beginnings.” Ralph Waldo Emerson
Todays source will talk about a common scenario which comes up when you have your NABC proposition in hand but unfortunately don’t have the funds to get your product off the ground and have been unable to secure funding from friends and family. At this point many begin to lose heart. They begin to doubt themselves and their belief in their idea gets shaky. An entrepreneur who has complete belief in his concepts and ideas will not lose hope at this point in time. We have several options still available to us which include angel investment, venture capital or even getting some leverage from your bank. The advice I give to individuals in this space is to get some funds together yourself or with your team mates the old fashioned way with a plan with specific goals.
In todays day and age angel investors are becoming more sophisticated and a proof of concept or prototype has becoming a necessity. Plans look great on paper and if you are an A-grade presenter you may make it through at the angel investment level. However, it is becoming increasingly more difficult to make it through without a prototype or proof of concept. The other day a friend called me asking for advice on an online stock photo website he wanted to launch. He had a lot of new twists to the conventional business model and he was essentially looking for some seed capital to convert this concept into a reality. Being a professional photographer with a good team I told him that they should raise money themselves and get a prototype of what they want to do together. This would make it easier for them to approach angel and VC investors.
Here is when things get a little blurry. Say you have skills in flash based development. You set up a home-based consultancy to promote your services with the goal to raise $10k to create your prototype. Things start to go reasonably well and you find yourself making relatively decent money without having to work at a full time job. You need to keep things in focus now, consulting work is highly customized and cannot be scaled. A lot of angels and VC’s would not be very interested in funding a project which does not have a viable exit strategy. Stay focused on creating a standardized product which can be used by millions of individuals rather than custom work developed for a specific individual. Falling into this trap is relatively common. Staying focused on the bigger picture is a vital key.
Once the prototype is developed get back out there and get some serious investment into your project to get it kick started. When you use this sourcing method to raise funding for your project remember to stay focused on the bigger picture. If you are developing a stock photo website ask your clients whether they buy photo’s online and if they don’t, how much they would want to pay for them. If you are a software programmer continue to take on projects which help you in developing modules for the larger project. Use this as a platform to get traction on the idea and to help you refine it along the way. Just remember to work with a specific goal , do not get sidetracked and lose sight of the ultimate objective .