I have had the good fortune to interact with some of the seasoned Angel Investors & VC's at one of the recently concluded 3rd edition of Medachievers Event.
There were few people in the audience who were eager to learn the intricacies of howto get funding. It was heartening to see the enthusiasm among the participants.
I could sum up few things for people who are seeking investments, I believe one of the best outcome of writing a business plan is to get your act together, to get your team together, to get everybody on the one page, and to commit, and polish, and hone your philosophy, which is expressed in a business plan. However, that's the theory. I think that it very seldom happens, and so people write business plans, and I wish that was the outcome. So it has no real value. The value would not have been the document, it would have been getting the team together.
The most significant takeaway from this one day event was Angel Investors, VC's & Incubators look for the founder and the team.
Because everybody knows that business plans, the forecast, they're absolutely meaningless, they're just numbers you pick out of the air, and they're just wishful thinking. it's about luckiness at some level, but it's also that you have this perspective, this vision, this outlook, this hope, and it's believable, that people can relate to it, it's conceivable that such a thing could be.
Creating a Prototype
My best piece of advice for a new entrepreneur is that you not focus onwriting a business plan in Word, creating financial projection with Excel, creating a pitch with PowerPoint, what you should focus on is making a prototype. Because with a prototype all the delusion, all the hallucinations, all goes away. Now people are either going to use your prototype or not use your prototype. And that is a very valuable thing to know and you can take all the Excel and say I just need one percent of this 100 billion market and I'll be this, you know, huge company but that's all wishful thinking so, the thing you should do is build a prototype, see if you can get people to use it.
“That has such great ramifications. First of all you'll learn a lot, like, you know, there's one thing to suppose people will use something, it's another thing to actually get them to use it”
You'll learn what they don't like, you'll fix it, you'll go back to them. Perhaps they'll use it this time. When you go to investors, rather than saying trust me, I can build this, now you're saying I built it, the dogs are already eating it, this is why you should fund me. Everything happens because you build a prototype.This is the concept of MVP, which is minimal viable product.