4 ms·

depends on what you're pitching. 10 deposits on a $5/mo service might not carry much weight to a VC. but 10 letters of intent on a more expensive b2b service

by noodle 16y ago

depends on what you're pitching. 10 deposits on a $5/mo service might not carry much weight to a VC. but 10 letters of intent on a more expensive b2b service is golden.

enjo 16y ago
You'll be hard pressed to find a V.C. willing to invest in a company at this early stage anyways. I would argue that finding folks willing to give you $5 is as valuable as LOI's. The point is to validate your model. It's never enough to simply ask people "would you be willing to buy this?" You have to figure out how to validate that when push comes to shove that they'll actually take action to do it. Talk is cheap after all. So if you can find a handful of folks to throw $5 your way, or at the very least enter into the purchase process for a $5/month subscription... well then you probably have something. Just as a LOI for a larger ticket product shows commitment from those larger companies. Both show that you have a product your target market is willing to actually pay for. That's huge.
- uxp 16y ago
  A startup from my area that I wasn't involved with basically did this tactic. They found a number of people interested in the product they wanted to build. They requested that the interested parties sign up at about $10/mo to be the first customers, and then the startup started building their product. Once they came around to launch time, the customers had already played around with the 'beta' product and given feedback, and nearly all of them have retained their subscription at $10/mo, where as new customers have to pay significantly more. I think its a reasonable trade off to give a discount to them, especially when they helped work through some of the bugs of the early phase. They may not be the customers that will make them rich by throwing them money, but they certainly helped get the startup to the position they are now.

by noodle 16y ago

depends on what you're pitching. 10 deposits on a $5/mo service might not carry much weight to a VC. but 10 letters of intent on a more expensive b2b service is golden.

enjo 16y ago

You'll be hard pressed to find a V.C. willing to invest in a company at this early stage anyways. I would argue that finding folks willing to give you $5 is as valuable as LOI's. The point is to validate your model. It's never enough to simply ask people "would you be willing to buy this?" You have to figure out how to validate that when push comes to shove that they'll actually take action to do it. Talk is cheap after all. So if you can find a handful of folks to throw $5 your way, or at the very least enter into the purchase process for a $5/month subscription... well then you probably have something. Just as a LOI for a larger ticket product shows commitment from those larger companies. Both show that you have a product your target market is willing to actually pay for. That's huge.

uxp 16y ago
A startup from my area that I wasn't involved with basically did this tactic. They found a number of people interested in the product they wanted to build. They requested that the interested parties sign up at about $10/mo to be the first customers, and then the startup started building their product. Once they came around to launch time, the customers had already played around with the 'beta' product and given feedback, and nearly all of them have retained their subscription at $10/mo, where as new customers have to pay significantly more. I think its a reasonable trade off to give a discount to them, especially when they helped work through some of the bugs of the early phase. They may not be the customers that will make them rich by throwing them money, but they certainly helped get the startup to the position they are now.