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Raising money at pre-MVP stage: terrible or great idea?
Hey Hunters, curious what you think about it!
When I was a 1st-time founder I raised money at the pre-MVP stage and thought it was great - I could hire a few teammates, build MVP, and so on.
But it turned out to be an awful decision:
- Valuation was terrible ($800k) because we didn't have traction
- Because of that I had a tiny runway to avoid dilution
- And because of the runway I was hurrying to get traction instead of a steady product discovery
What do you think?
My full thread is here https://twitter.com/imdimakhan/s...
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Pawel
Hi!
As a consultant, I can only answer in one way: it depends. ;) If your product is one of the best ideas and brings real value, then hold off as long as possible before raising funds.
If it's just one idea among many, and it's sort of on the way to what you want to do ultimately, and a quick capital raise will allow you to:
- "get in the game",
- sell the startup,
- earn some cash to continue investing;
then raise capital faster.
IN MY OPINION ;)
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After meeting with alot of people validating my idea and asking some friends in the VC biz they advised me to go as far as i could before i did anyting that way i could keep more and maybe most of the company. Fine tune your product first and it will pay off. Good luck
I think it honestly depends on the scale of the product and what can be achieved with the money you set out.
If you can build out a solid MVP and validate your idea then obviously investing the 50k personally is the way to go. However, some people's 'MVPs' simply can't be developed for 50k so will require funding even at that stage.