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Do seed stage investors invest in ideas alone or look for more than just an idea?

I have an idea that I am really passionate about. However, I don't have the money needed to create or market it. Will early stage investors invest in just an idea or is crowdfunding the best path?

43 Replies

Josh Miller
1
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Josh Miller Advisor
EVP, Country GM - Zapper USA
Investors will rarely invest in just an idea. Crowdfunding might work, depending on the product. Otherwise, do what you can to build a minimum viable product for raising a seed round. The best way to get around that chicken and egg problem is to have a founding team (designer, developer, hustler) to allow that minimum viable product to be built for free.
Jeffrey Weitzman
4
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Jeffrey Weitzman Entrepreneur
Consultant at Space-Time Insight
Times have changed. Where "seed" investors used to back great founders with big ideas, my recent experience has been that institutional seed and early stage investors want to see product fit and a solid go-to-market strategy with real validation (doesn't have to be revenue) from that market. To fund great ideas without a product, I think you have to look to bigger friends and family investment and individual angel investors, who are either open to more risk, or have experience in the field and can self-validate your idea and strategy to some extent.
William Agush
2
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William Agush Advisor
Founder and CEO at Shuttersong Incorporated
I raised money with just an idea. But you need a very strong idea and evidence you understand the market and have the experience to run it. Feel free to reach out and I'll share my experience. Also crowdfunding is not the perfect path the people want it to be. Sent from my iPhone please excuse any typos William Agush CEO Shuttersong Incorporatedl +1 [removed to protect privacy]
Patricia Wetzel
3
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Patricia Wetzel Entrepreneur
Founder at The Anti-Cancer Club™
Our experience is that you need to prove your market, your ability to reach it, build the platform and monetize it before anyone will even talk to you. I have a team that's created over $6 B in shareholder value including several Silicon Valley IPOs, we are looking at a global multibillion dollar market that is totally unserved and I cannot get in the door to discuss anything without a monetized POC for the final leg of this business. Suggestions welcomed, and William, I'd love to speak with you about your experience! Congrats!
Gabor Nagy
5
0
Gabor Nagy Entrepreneur
Founder / Chief architect at Skyline Robotics
Patricia and others are right: It's a catch-22: most investors won't fund you until you are at a point where you don't need funding.
You need funding the most when you start building your product / prototype, but nowadays, you are pretty much expected to build the prototype yourself, get clients, build a revenue stream etc.
At which point, why on Earth would you want to take other people's money and give up a chunk of your equity, or worse: risk losing control of you blood and sweat-built company entirely (to investors)?
As far as I'm concerned, "I'm monetized" = "I don't need/want funding."
I'd much rather grow my business organically than risk losing control of my company etc.
Think of it this way: what exactly would an investor bring to the table, when you already have a product, clients and revenue?
At that point, "outside money" is nothing, but unnecessary risk/liability.

Patricia Wetzel
3
1
Patricia Wetzel Entrepreneur
Founder at The Anti-Cancer Club™
That's exactly where we are and that's exactly the conclusion we've come to. Slower organic growth can be financed with non-equity vehicles. I think of the story of a gentleman who built a company. Twitter wanted to buy it. He said no. Repeatedly. Until they made him an offer he could not refuse.

With enough cash flow, one can refuse for a very long time. Perhaps what we're seeing in this conversation is a shift in market opportunities. Angels used to invest early; now they're risk adverse. VCs won't talk to you (unless you're 20 years old out of Stanford and have a app that says Yo!--they raised 1 m on that stellar idea! Download it and see what you think!); and everyone follows the herd. This year, it's medical record; this year, it's wearables. The herd goes left; the herd goes right. I think we can dodge the herd and find a saner, ultimately more profitable path that rewards the real creators and risk takers in the crowd. My team and me.
Joe Monastiero
0
0
Joe Monastiero Advisor
CEO, Founder nFlate
I wrote a post on this subject last year you might be interested in reading:

https://www.linkedin.com/pulse/20141203165040-1101775-the-paper-napkin-is-dead.
Patricia Wetzel
0
0
Patricia Wetzel Entrepreneur
Founder at The Anti-Cancer Club™
Joe,

The linked in link isn't active. Can we find the article elsewhere? Thank you!
Patricia Wetzel
0
0
Patricia Wetzel Entrepreneur
Founder at The Anti-Cancer Club™
oops! The link above DOES work. The link in the email does not. My apologies.
Patricia Wetzel
0
0
Patricia Wetzel Entrepreneur
Founder at The Anti-Cancer Club™
Joe,

Excellent story. Thank you. Wish I'd read this a few months ago! And your point on the accelerators is spot on. We actually got to the finals (11 companies out of over 1,000) in an international accelerator contest, only to be told we had to have a monetized POC. They encouraged us to come back when we did.



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