The other more traditional way is to build the product, start selling it in the market and slowly grow. When you gain traction then financers come to you. Am I correct in my thinking? Any one way more advisable/prevalent?

More or less correct that in raising seed, that most companies that successfully raise, fall into two camps: either a conceptual raise (with little to no evidence) or a traction-raise. The conceptual raise is almost always easier but puts most emphasis on the founder(s) which means that without a lot of prior success or good predictors for future success, a conceptual raise is simply not possible for many founders.

A traction raise can be really tough because the "metrics that matter" are so subjective to each investor and what's already been achieved gets discounted almost to zero and the analysis is on the question of "how much bigger can this be?" which leaves most inexperienced founders unable to articulate a credible vision of how it can become a billion-dollar business (at the very least in enterprise value)

What to raise, when to raise, and how to raise are all questions I have helped a lot of Clarity members answer. I encourage you to take a look at the reviews other Clarity members have left about their interactions with me on this subject. If you're serious about understanding your options, I'd be happy to help you in a call.

Answered 7 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2020 LLC. All rights reserved.