You don't need a prototype. Absolutely not. But is there an advantage to raising money before you have a prototype? I'd say no, although it may vary case by ca

You don't need a prototype. Absolutely not. But is there an advantage to raising money before you have a prototype? I'd say no, although it may vary case by case. Instead of focussing and building your product, now you have to build your product AND make sure your investors are pleased. Also think about the valuation. Imagine going to investors saying "we built our product, we even have some customers who've given us some positive feedback and constructive criticism. We found that X meets our customers needs but we need to work on Y and Z." I'd imagine the valuation would be higher and less speculative. I'd also imagine this situation to be more advantageous, simply by giving you more confidence when raising money.