To every startup entrepreneur, seeing their concepts or ideas morph into tangible, hot selling, money-spinning models is the stuff of dreams.
The journey from a scribble or that remarkable eureka moment, to a full-blown commercial enterprise, however, is strewn with speed breakers. The biggest stumbling block perhaps is access to precious capital held by the pool of investors out there.
To get this selective and astute flock interested and loosen their purse strings, what you may need is an MVP.
This Minimum Viable Product (MVP) is basically a sort of a teaser to your exciting startup venture.
But there are some tricky questions to be answered first. How do you get funded for MVP? Do I need an MVP for seed funding? Do you need an MVP to get funding?
Well, building an MVP to function as close to real-life demands both time and money. So to answer – How do you get funded for MVP?
- Start networking early on with a pool of investors
Build and nurture a relationship of mutual respect and high professional integrity with them. Then zero down on those who you think are most receptive to your ideas.
- Work on the Business Plan
Diligently work on fine-tuning and developing an almost rejection-proof business plan. Anticipate and be prepared to answer all the hard questions with complete assurance.
- Use all available market data and statistics
Research and present authentic data intelligently and create real ROI projections. Remember numbers will always connect very well with prospective investors.
So if simplified – How do you get funded for an MVP – this actually involves advance planning and collating every resource, to showcase your business in a positive light. This will definitely give you an edge while pitching to get funded for an MVP.
The next logical question that arises could be – Do I need an MVP for seed funding? There is no fixed answer to this. This is your judgment call. But the key points to remember here are –
- It helps investors know your business better
Knowing the startup investor mindset, having an MVP at the seed funding timeline is definitely something that can add that much-needed zing to your pitch resume. It is something tangible and relatable.
- It helps investors evaluate your business worthiness
The MVP helps investors evaluate the commercial aspects, analyze the market potential and see if the numbers all add up. By creating an MVP, you can make your pitch perform and make it sound much more confident, realistic, and investment-worthy.
- It helps sway investor opinion in your favor
An MVP could swing the opinions of angel and institutional investors your way, simply because they have the MVP as a solid point of reference. With the needle moving from “maybe to a must-do” it will help you get that much-needed seed funding to invest in development, critical costs, and scale up operations much faster.
Seed funding for your MVP is a leg up in the race for an idea or a product, to go from “prototype to the on the shelf” stage. So, do you need an MVP to get funding? Well, if you want to bring in that comfort level for prospective investors, it is something you need to consider seriously.
Now, as a startup founder, you feel you have a rock-solid business plan. You also feel you have a “sure thing” that the market and customers are just waiting for. Plus, you are also sure that you have access to a network of investors that are primed and ready to invest in your enterprise.
At this point, you may pause and ask yourself do you need an MVP to get funding? Is it worth the time and effort?
The answer to this is:
Think of it as a test drive for your investors
What do you do when you buy a new car? You would ask for a test drive, explore features, see how it handles, and check for pick-up and mileage among other things, before putting down money on it. It is the same for investors.
Give your investors a chance to experience your business model
Think of the MVP you create as the car and your investors as the buyers. It is something that will definitely give them that much more clarity and comfort in understanding and appreciating your business proposition. It will also make communication so much easier. Ultimately it will help put your startup in the driver’s seat. Just don’t forget to buckle up.
The MVP can accelerate decision-making to a great extent when you really need an investor who is sitting on the fence, to come over to your side. There is no better argument to the question: do you need an MVP to get funding?
To learn more about MVP and funding for your startup – Connect with CoffeeMug. A highly reliable, warm, and professional space with just the kind of entrepreneurs and mentors you would appreciate networking with. Learn from their experience and benefit from genuine advice.
FAQs
Q. Do I need an MVP for seed funding?
A. For a seed round, the startup must have a minimum viable product (MVP). A minimum viable product (MVP) is also necessary for gathering feedback for future product development. Investors frequently regard firms without a minimum viable product (MVP) as “too early and too risky.”
Q. What is an MVP pitch?
A. A Pitch MVP allows a startup founder to interact with his or her target audience in order to determine whether they are willing to invest in the startup idea through the exchange of money.
Q. What makes a good MVP?
A. A good MVP is a functional and usable product with enough features to allure early-adopter clients and verify a new concept early in the development cycle.
Q. Can you get funding for MVP?
A. You can receive a minimum seed investment to cover development costs and then turn your MVP into a full-fledged product. When your MVP is constructed using an Agile methodology, you have the flexibility to make changes as needed to save costs and build a lucrative product.
