We are working on a software tool that has come about after discussions with a contact in our industry.
We have built a prototype and they have already managed to pre-sale to a large national tourist board. He has indicated he has interest from other interested parties in our industry (we are in travel) and is working to secure more pre-sale.
The cost of the developers to help with this is our barrier as we are working on this full time but need more resource. Does anyone have any experience on attracting investment? We have a market validated, one client in place but just need the help to grow quickly
Get your business plan and a pitch deck worked out before speaking to any investors
Remember that investors want a bang for their buck - so a hefty return and that means a decent chunk of the business
Your plan should focus on the size of the market (potential revenue figures), how you plan to tap that market (GTM strategy), a high-level plan of feature development (how are you going to stay ahead), some proof that you’ve done some risk and competitor analysis (is there already market validation and do you know your enemy), and that you have some idea of how to reach profitability (can this thing be self-sustaining and when)
Then start looking for investors with a portfolio that includes businesses in that industry
If you’re pre-revenue or only have one customer, that doesn’t exactly scream traction… most investors will want to see that you’re either already generating sizeable revenue ($100k+/year) or that you’re able to sign up new customers regularly and reliably and that they don’t churn out quickly
So, given your points, what would you suggest at this time? We could work on getting some more pre-launch cash in through the partner we have. I’ve an extensive business plan which is built on a long term development strategy. Early users will retain access to new features as they are rolled out without price increases. Once they are onboard, the tie in is quite long given the nature of the product. We are essentially taking a task within the travel environment and improving the process and cost. The trade partner with whom I have discussed this has given some feedback and they are set to be implemented too.
It currently sounds like you’re wholly dependent on this one partner right now
That feels like a major risk already
Can you find a way to diversify your relationships to mitigate them pulling out or building their own version? Or can you lock them in with some long-term contractual agreement? Who owns the IP?
Aside from those questions, when you’re tight on resource but you have to keep building, you have a pretty important choice to make:
Knuckle down and build as fast as you can while ALSO looking for funds (i.e. put in the hours and hard work and do what you must)
OR
Accept that development is going to be slower and ruthlessly prioritise accordingly - focus attention on the next big value-add for potential customers that is also low hanging fruit from a dev perspective and keep trying to bring in more paying customers
One client but this will undoubtedly open the doors to others. Once they see one client using this, they’ll seek to jump onboard as this industry is very much ‘follow suit’.
We can tie them in for 24 months (that is in our agreement given the long term nature to see the usage/benefits). We 100% own the IP And can sell into other industries - already have this in the business plan for other training opportunities.
I suspect we can get live by End Feb/start March for v1 then hopefully rev generated will allow us to take on help. I also own a football ticket business that has its own team and am taking a step back from that to fully focus on this project.
What if this partner who is taking you to market decides to use someone else or wants a unfair gain from you? Do you have other options besides him?