Creating a product isn’t cheap, which is why many businesses seek project funding or capital to get their project off the ground. It makes sense- it takes money to make money. So how do you increase your chances of securing the funding you need? Prototyping. 90% of startups fail. Even businesses that are doing well can’t afford to become complacent since 96% will fail within 10 years. One of the biggest reasons? Lack of cash. Sometimes this is due to “stupid spending”, and other times it’s due to an inability to raise the necessary capital in the first place.
One key reason why so many businesses run out of cash is because they haven’t grown fast enough. If you can grow quickly, you’ll bypass some of the biggest business killers- losing personnel, losing customers, losing to competitors, and losing passion.
As you can see, the importance of raising funding or capital can’t be overstated. And prototyping can help you secure the funding you need to get your project off the ground, create a market-ready end product, and scale your business fast.
Luckily, prototyping is an excellent way to help you secure this funding. Here’s why:
Create a connection
Humans are more likely to put up money if we have an emotional connection to something. A prototype makes this much more likely to happen. Investors’ attitudes about a potential product change when they can see it or use it. This helps you overcome the “imagination barrier” (people won’t get excited if they need to use their imaginations in order to understand your project).
Expose weak points
This may not sound like a good thing, but highlighting your weaknesses can show which further resources you need. Plus, when an investor gives feedback, they naturally become…invested.
Recent advances in technology have made it easier than ever for you to create a working prototype. And investors will expect you to utilise these resources if you’re looking for capital.
Prototypes are also more cost-effective than ever before. Showing that you’ve taken the time to create a prototype demonstrates that you’re serious and your project is more than just a vague idea.
No investor wants to commit their cash to a risky bet. Prototyping allows you to work out issues at the very beginning of the process. This means that you’re showing the best possible iteration to potential investors. Prototyping also means that a project is more likely to stay within your budget, since problems are fixed before the actual development begins. And that’s great news for investors.
Even if your initial prototype isn’t perfect, you can still build credibility by demonstrating that your idea is viable and that you have a vision. Investors may turn down hundreds of pitches a year, so providing them with a solid concept and working prototype can be the difference between the funding you need and “It’s a no from me.”
There’s a reason why online retailers like Etsy and Amazon have so many product images- we all want to know what it is we’re buying. Proof of concept is one of the most important steps when you’re looking for funding.
If you’ve struggled to launch your product, creating a prototype may be the step you need to take to get potential investors excited. These days, most business owners can’t afford not to have a prototype in hand for discussions about funding.
At Intergy, we can help you turn your project from a dream into reality. Get in touch today and let’s discuss your options.