Purpose of this Guide

We wrote this guide on pre-seed funding because we felt frustrated that a comprehensive, easy-to-understand resource like this didn’t exist for founders.

We’ve been in your shoes. As new founders, we didn’t understand the jargon and how startup funding worked.

This guide aims to give you an easy-to-understand snapshot of the pre-seed funding landscape and help you navigate it to get the investment you need.

Who Should Read This Guide

If you are a new founder or even an experienced founder who still has questions about pre-seed funding, this guide is for you.

Purpose of this Guide

We wrote this guide on pre-seed funding because we felt frustrated that a comprehensive, easy-to-understand resource like this didn’t exist for founders.

We’ve been in your shoes. As new founders, we didn’t understand the jargon and how startup funding worked.

This guide aims to give you an easy-to-understand snapshot of the pre-seed funding landscape and help you navigate it to get the investment you need.

Who Should Read This Guide

If you are a new founder or even an experienced founder who still has questions about pre-seed funding, this guide is for you.

Pre-Seed Stage in the Startup Lifecycle

The pre-seed stage is typically meant to be the stage in a startup’s lifecycle where the company is validating that its product is useful and impactful and customers are willing to pay for it. As mentioned above, this might not apply to all startups.

Companies in some industries might be able to develop a prototype and validate its viability with minimal or no funding. In other industries, particularly ones that require a lot of research and development, the pre-seed stage might simply entail in-depth customer research, and the company might not even build a prototype.

Seed Stage Follows Pre-Seed

Companies that have validated some degree of customer adoption and revenue generation usually go onto raise a seed round or Series Seed round. The bar for when a startup is ready for seed funding can vary greatly depending on the industry and expertise of the founding team.

For example, a company is a less desirable vertical that is led by founders without remarkable technical accolades or diplomas from a top-ten university might need to get to $500K annual revenue with a 30% month-over-month growth rate. Whereas another company in a hot vertical and high-pedigree founders might be able to raise a huge pre-seed round with just an idea.

Idea Stage, Friends and Family, and Angel Stage Precede Pre-Seed

Prior to the pre-seed stage in a startup’s lifecycle, we find two or three other stages: idea, friends-and-family, and angel stages.

The idea stage as the name suggests is when the company’s founders formulate a solid product and business idea. They might do a great deal of market and customer research to fine-tune their business idea.

The friends-and-family stage is sometimes the next step after solidifying the product and business idea. The founders might turn to their friends, family, and colleagues to raise a small amount of capital to build a simple prototype or further validate their concept. It’s important to note that many founders lack a family and friend network that can yield substantial investment at this stage.

As the business and product idea become further refined, founders might then raise a small angel round to gain greater fiscal resources. These resources are often aimed at further refining the product and go-to-market activities, where the company begins to sell its product. An important thing to note here is that angels might invest at this early stage, but they also often invest at later stages such as Series Seed, Series A and beyond.

What Do Pre-Seed Investors Look for?

Most importantly, pre-seed investors are looking to make money from their investment–a ton of money. To do that, they are balancing risk and reward.

On the reward side, they are looking for companies that can serve huge markets, charge a lot of money for their products or services, or ideally both.

On the risk side, they are trying to limit the possibility that the company in which they are investing will fail.

This often comes down to a few broad categories.

Founders and Team

Investors are looking for founders that are very likely to succeed. They often use the founders’ pedigree as an analog.

Stanford and Ivy League university graduates are often much preferred to alumni of less prestigious universities. Former employees of top Silicon Valley tech companies like Facebook, Apple, Amazon, Netflix, and Google (FAANG), top financial institutions like Goldman Sachs, or top consultancies such as McKinsey are also much more valued than folks who have worked for less glamorous companies.

Founders with exceptional technical expertise, such as top machine learning scientists are prized much more than non-technical founders. However, founders with domain expertise, who have lived the problem they are solving are also highly regarded by some pre-seed investors.

What Are Investors Looking for at the Pre-Seed Stage

It is important to know that every startup seeking investment from a pre-seed VC firm or angel investor is in competition with others.

Investors have no shortage of investment opportunities, but all investors have a limited pool of capital from which to invest. Plus, most startups at such an early stage will fail losing the investors’ money.

There is no bar that startups have to cross to win investment. Instead, your company has to seem like the best investment out of dozens or hundreds of others.

At the pre-seed stage, investors evaluate factors such as:

• The industry that your company is serving;
• Your product’s theoretical differentiation and value;
• The expertise and quality of you and your team;
• The extent to which you have validated your product as a uniquely effective solution to the customers’ problem;
• The extent to which you have validated that customers are willing to pay for your product;
• How well you have developed a mechanism to reach your customers and sell to them;
• How well you are able to keep customers;
• How your startup fits into their portfolio strategy; and
• Other factors such as macroeconomic trends, timing of your entry into the market, etc.

Your goal is to score the highest that you can in all of the categories that each investor is evaluating.

Validating Your Idea

The fortunate thing is that you do not need any money to start validating your idea for a solution to a problem that a group of people are having. Investors want to feel confident that your solution has potential. Otherwise, they are taking a huge gamble on something that they have no idea if it will work.

Look at Competitors

There is almost no challenge that people have to which there aren’t already solutions or products. Practically every startup in every industry has competition, and sometimes tons of competition.

This isn’t a bad thing. There are plenty of huge companies that have been built in competitive industries. There were tons of messaging apps before Slack was created. There were likewise dozens of scheduling platforms before Calendly was built. What made them successful was not that they were the only solution to real-time online communication or online meeting scheduling. However, the specific way in which each solved this problem was the real magic and drew scores of consumers.

You should take inspiration from Tope Awotona, the founder of Calendly. Tope spent six months using almost 30 existing scheduling platforms. He tried every feature, read every support article for each solution, studied every review, and even contacted each company’s customer support department. At the end of the six months, he knew exactly how to craft a scheduling solution that had just the right features presented in exactly the right way. Not surprisingly, Calendly took off and is now a $3 billion-dollar company.

Talk to Users

It’s really astounding how many founders never even have a single conversation with a potential user. They just assume that they have a great idea and start building something or go try to raise money.

Investors consider these founders to be very amateurish because it’s naive to think that you will nail your product solely from your imagination. Moreover, it’s fairly easy to verify and refine your idea or solution to a given problem that your users are having.

The key is to focus on the details because it’s the precise way in which you craft your product that will either allow it to sink or swim. Once again, assume there are other companies that are solving the same problem that your product will be solving. The key is how does your product do it better.

Although a random benchmark, many founders speak to at least 50-100 potential users. Once again, you are competing against them, so if you only speak to 5, who do you think investors will favor?

Building a Minimum Viable Product

Would you be more convinced if I told you that people think I have a great idea for a product or if I actually showed you data that proves they use it incessantly? I certainly pay more attention to founders that can do the latter.

Theoretical validation that comes from market and user research is great, but nothing beats real-world validation using a real product. That’s why you should build an MVP if possible.

Build a Low-Code or No-Code Prototype

I get it. Some ideas are leading edge innovations that might take a long time to build, such as a self-driving car. However, most founders are building either mobile apps or web apps, and you can often build a low-code or no code prototype in a weekend. So there is really no excuse not to have some usage data if you are building an app.

Hire an Off-Shore Engineering Firm

If your app is a bit more complicated, you might want to hire an offshore engineering firm. I can hear it now. A bunch of whining complaints that “there are so many bad ones out there” and “how am I supposed to find a good one?” Get over it. As a founder, your job is to do the impossible, and if Tope Awotona can do it and build a $3 billion-dollar company, you can too. And if you’re not willing to try, than I’m sorry to say, startup entrepreneurship isn’t the right profession for you.

Assembling a Founding Team

When you are launching a company, your team needs to be able to execute across at least the following areas:

• Team building
• Fundraising
• Product development
• Marketing
• Sales
• Administration and operations

You should create a team that can make meaningful progress in these basic functional areas. Investors will want to see evidence that your team can move quickly and effectively across these functions.

That does not mean, however, that you must bring on co-founders. You might not want co-founders. There are a dozen other creative ways to build a team such as part-time help, equity-compensated advisors, off-shore talent, etc.

Bringing on co-founders is a huge, risky decision. In fact, co-founder friction is one of the leading causes of startups dying. Moreover, research shows that single founders tend to be more successful than multi-founder teams.

The challenge is that many VC investors insist on only backing teams with one or more founders. I would strongly encourage you not to pair up with a co-founder solely for that reason.

Create a Pitch Deck

Your pitch deck is the primary way by which you will be conveying the opportunity to invest in your company to investors, so it’s worth spending a lot of time making it as polished as possible.

Investment Pitch Deck Outline

In general, a good pitch deck will have the following sections:

• Title slide that sums up the breadth of the opportunity that your startup is addressing;
• Team slide that shows why your core team has what it takes to win in your market;
• Customer slide that precisely and descriptively lays out who is your ideal customer;
• Problem slide that describes in detail the problem that your product is solving;
• Before and after slide that illustrates your customer’s life before and after your product;
• Solution slide that describes in detail how your product solves the customers’ problem uniquely and better than existing solutions;
• Market slide that quantifies the size of your addressable market, preferably from a bottom-up perspective;
• Competition slide that further clarifies who are your main competitors and how your product is different;
• Financing slide that clearly lays out what your company is raising and what milestones it will meet with the invested capital;
• Growth projection slide that ties the aforementioned milestones to revenue growth.

The order of the above slides does not have to be exactly as written above, and you might choose to leave out some, but this is a basic framework that you can use.

Tell a Story

Keeping in mind that investors see hundreds if not thousands of pitch decks, one powerful way to stand out is with a good story. Having seen thousands of pitch decks myself, I can tell you that scarce few amount to more than just a collection of facts. I wish founders would do a better job weaving in a compelling story.

The best story framework that I’ve seen is the StoryBrand framework as described in Donald Miller’s Building a Story Brand. It goes something like the following:

Your customer is the hero of your story–not you. Just like every hero in a good story, she has to contend with adversity in some form. If she does not succeed, bad things will happen. If she does succeed, she will attain a transformation. You, the company or brand, are her guide. Your job is to present the hero with a plan and enable her transformation. There is more to it, of course, and I strongly recommend reading Miller’s excellent book that is sure to help you craft a compelling story that will stand out from among hundreds of other less inspired pitch decks.

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Validating Your Idea

The fortunate thing is that you do not need any money to start validating your idea for a solution to a problem that a group of people are having. Investors want to feel confident that your solution has potential. Otherwise, they are taking a huge gamble on something that they have no idea if it will work.

Look at Competitors

There is almost no challenge that people have to which there aren’t already solutions or products. Practically every startup in every industry has competition, and sometimes tons of competition.

This isn’t a bad thing. There are plenty of huge companies that have been built in competitive industries. There were tons of messaging apps before Slack was created. There were likewise dozens of scheduling platforms before Calendly was built. What made them successful was not that they were the only solution to real-time online communication or online meeting scheduling. However, the specific way in which each solved this problem was the real magic and drew scores of consumers.

You should take inspiration from Tope Awotona, the founder of Calendly. Tope spent six months using almost 30 existing scheduling platforms. He tried every feature, read every support article for each solution, studied every review, and even contacted each company’s customer support department. At the end of the six months, he knew exactly how to craft a scheduling solution that had just the right features presented in exactly the right way. Not surprisingly, Calendly took off and is now a $3 billion-dollar company.

Talk to Users

It’s really astounding how many founders never even have a single conversation with a potential user. They just assume that they have a great idea and start building something or go try to raise money.

Investors consider these founders to be very amateurish because it’s naive to think that you will nail your product solely from your imagination. Moreover, it’s fairly easy to verify and refine your idea or solution to a given problem that your users are having.

The key is to focus on the details because it’s the precise way in which you craft your product that will either allow it to sink or swim. Once again, assume there are other companies that are solving the same problem that your product will be solving. The key is how does your product do it better.

Although a random benchmark, many founders speak to at least 50-100 potential users. Once again, you are competing against them, so if you only speak to 5, who do you think investors will favor?

Building a Minimum Viable Product

Would you be more convinced if I told you that people think I have a great idea for a product or if I actually showed you data that proves they use it incessantly? I certainly pay more attention to founders that can do the latter.

Theoretical validation that comes from market and user research is great, but nothing beats real-world validation using a real product. That’s why you should build an MVP if possible.

Build a Low-Code or No-Code Prototype

I get it. Some ideas are leading edge innovations that might take a long time to build, such as a self-driving car. However, most founders are building either mobile apps or web apps, and you can often build a low-code or no code prototype in a weekend. So there is really no excuse not to have some usage data if you are building an app.

Hire an Off-Shore Engineering Firm

If your app is a bit more complicated, you might want to hire an offshore engineering firm. I can hear it now. A bunch of whining complaints that “there are so many bad ones out there” and “how am I supposed to find a good one?” Get over it. As a founder, your job is to do the impossible, and if Tope Awotona can do it and build a $3 billion-dollar company, you can too. And if you’re not willing to try, than I’m sorry to say, startup entrepreneurship isn’t the right profession for you.

Assembling a Founding Team

When you are launching a company, your team needs to be able to execute across at least the following areas:

• Team building
• Fundraising
• Product development
• Marketing
• Sales
• Administration and operations

You should create a team that can make meaningful progress in these basic functional areas. Investors will want to see evidence that your team can move quickly and effectively across these functions.

That does not mean, however, that you must bring on co-founders. You might not want co-founders. There are a dozen other creative ways to build a team such as part-time help, equity-compensated advisors, off-shore talent, etc.

Bringing on co-founders is a huge, risky decision. In fact, co-founder friction is one of the leading causes of startups dying. Moreover, research shows that single founders tend to be more successful than multi-founder teams.

The challenge is that many VC investors insist on only backing teams with one or more founders. I would strongly encourage you not to pair up with a co-founder solely for that reason.

Create a Pitch Deck

Your pitch deck is the primary way by which you will be conveying the opportunity to invest in your company to investors, so it’s worth spending a lot of time making it as polished as possible.

Investment Pitch Deck Outline

In general, a good pitch deck will have the following sections:

• Title slide that sums up the breadth of the opportunity that your startup is addressing;
• Team slide that shows why your core team has what it takes to win in your market;
• Customer slide that precisely and descriptively lays out who is your ideal customer;
• Problem slide that describes in detail the problem that your product is solving;
• Before and after slide that illustrates your customer’s life before and after your product;
• Solution slide that describes in detail how your product solves the customers’ problem uniquely and better than existing solutions;
• Market slide that quantifies the size of your addressable market, preferably from a bottom-up perspective;
• Competition slide that further clarifies who are your main competitors and how your product is different;
• Financing slide that clearly lays out what your company is raising and what milestones it will meet with the invested capital;
• Growth projection slide that ties the aforementioned milestones to revenue growth.

The order of the above slides does not have to be exactly as written above, and you might choose to leave out some, but this is a basic framework that you can use.

Tell a Story

Keeping in mind that investors see hundreds if not thousands of pitch decks, one powerful way to stand out is with a good story. Having seen thousands of pitch decks myself, I can tell you that scarce few amount to more than just a collection of facts. I wish founders would do a better job weaving in a compelling story.

The best story framework that I’ve seen is the StoryBrand framework as described in Donald Miller’s Building a Story Brand. It goes something like the following:

Your customer is the hero of your story–not you. Just like every hero in a good story, she has to contend with adversity in some form. If she does not succeed, bad things will happen. If she does succeed, she will attain a transformation. You, the company or brand, are her guide. Your job is to present the hero with a plan and enable her transformation. There is more to it, of course, and I strongly recommend reading Miller’s excellent book that is sure to help you craft a compelling story that will stand out from among hundreds of other less inspired pitch decks.

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Create a Timeline and Plan

Although it’s your decision ultimately how you spend investors’ money, it’s not a really blank check. You will be judged, harshly, by your next round of investors, who will critique how you spent your pre-seed investment dollars.

At the end of the day, future investors will want to see that however you spent your pre-seed capital, you strengthened your product-market fit and grew your revenue. If you invested a lot of money into marketing, for example, and your revenue hardly budged, future investors will have little faith that you won’t squander their investment too.

It’s critical, therefore, to create a solid plan that includes key milestones, when you expect to hit those milestones, and how you plan to make them happen. Your plan might change, but if you have no plan, you will be much more likely to waste money and lose momentum.

It is also a good idea to work backward from where you need your business to be to have a strong shot at raising the next round of funding–probably a seed round. What those milestones should be will depend on a number of factors such as your industry, etc., but you can ask your current investor or future seed investors what they might like to see.

Effective Use of Capital

To raise a seed round, you will need to either show outstanding revenue traction or user engagement. Any spending that does not get you closer to those goals is a waste of money.

Once again, you are constantly competing with scores of other startups, so it’s not enough to get some revenue or some user engagement. Your revenue traction or user engagement must be stronger than the next 99 startups fighting for seed capital.

Don’t Paint Yourself into a Corner

If you do not achieve impressive milestones with your pre-seed funding, you will find yourself in a really difficult situation. Future seed investors will have a hard time believing that if you fail to hold up your promise with your pre-seed investors, things will be any different with them.

Three Biggest Areas of Waste

Without a doubt, the two areas where I have seen founders waste the most money are engineering and marketing.

Solving Imaginary Problems

Despite advice to the contrary, founders constantly go on Quixotic product-building journeys that gobble up their cash and lead to little or no tangible return. These founders do not talk to users or test designs or prototypes, they just build whatever is in their head.

Obsessing Over Meaningless Details

Another trend that I’ve seen too many times to count is founders obsessing over meaningless product details that don’t actually affect user engagement or revenue. There are infinite such details, and they will happily burn through limitless piles of cash.

Going All in on Ineffective Marketing

The final pattern that seems to consistently repeat itself is founders spending big on unproven marketing or when marketing is not needed. I know of one startup that spent $250,000 of a $750,000 pre-seed raise on a fancy marketing company that brought in a few hundred dollars–yes hundred–of business. Ouch! Try explaining that to a seed investor.

At the pre-seed stage, marketing starts with disciplined experimentation. No startup that I have ever heard of or seen has nailed its messaging and channel on the first go-around. Instead, it takes months of systematic experimentation to find the messaging that resonates most and the channel (print ads, conferences, podcasts, Google ads, etc.) that reaches your audience best.

Running out of Money = Death

I know a very successful startup founder who sold his company for hundreds of millions of dollars in the past. He is launching a new startup and is barely spending any money as he and his co-founders are getting it off the ground.

They have millions of dollars in the bank, but they are just paying the three of them minimal salaries. Their team consists of the CEO, an engineer, and a marketer. They refuse to increase their spend until they clearly have a product that customers can’t get enough of and until they have nailed their marketing.

Why?

Because this founder has been through it, and he knows full well that if they don’t deliver results on this first round of investment and run out of money, it’s game over.

Husband your resources. Don’t run out of money.

Investor Relations

Once again, fundraising is sales. And as any great salesperson will tell you, success in sales depends on relationship building.

Think about it. You are essentially asking investors to make a purchase worth hundreds of thousands of dollars–maybe millions of dollars. In this case, they are purchasing shares in your company.

If you had to make a million-dollar purchase from someone you barely met, wouldn’t you want to get to know them first? Wouldn’t you also want to really inspect what they are selling? I hope you would!

Immediately Start Growing Your Seed Investor Network

After you raise your pre-seed, you should immediately start growing and engaging your seed-stage investor network. I don’t mean drop everything else, neglect building your business, and just hang out with investors.

What I do mean is that every week you should add at least one seed-stage investor to your network. You should also engage your seed-stage investors once a month or at least once a quarter. This can be straightforward. Send a monthly update to your list of target seed investors, and try to do a quarterly update call with them.

Preparing for a Seed Round

The number one thing that all investors want is to make a return on their investment. The last thing they want is to lose their investment. They are constantly balancing risk and reward.

Reduce Risk

First, show that you can turn investment into progress. If you can’t show a history of doing that, what hope do seed-stage investors have that you won’t waste their investment? Make a case that you are an outstanding steward of invested dollars and have a history of adroitly turning funding into milestones and traction.

Second, show that you have built something that people really love. As mentioned in the history of pre-seed section, the seed investors have higher and higher expectations. It used to be that you could raise a seed on an idea, but no more. Nowadays, you need to show proof that at least some group of users are fanatical about your product.

Third, show that people are happy to pay money for your product. Even if users love your product, sometimes it’s hard to get them to pay. That’s. a huge risk for investors.

Highlight Reward

An advisor once told me that you have to tickle an investor’s greedy nerve. In other words, you have to make them believe that your company will make tons of money and that they will make a big return on their investment. The best way to do this is by both showing growth momentum and articulating how big your business can get.

To show growth momentum, you should highlight both how much money your business is making as well as how fast your revenue is growing. If that’s not possible, you can also highlight usage and user growth.

At the same time, you need to quantify how much revenue your business could make every year. The best way to do that is to back out how many customers you need to serve at your current revenue model to get to $100 million in annual revenue. Further, you should have a detailed and reasonable plan of how you plan to get there.

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Tools for Market Research and Validation

There are a number of great customer and user research tools that can help you get valuable insights on user needs and start to validate your idea.

Google Trends

Google Trends is a great free tool that lets you see what users are searching for, so you can figure out what is hot and where gaps might lie.

SEM Rush

SEM Rush might technically be a search engine optimization tool, but you can learn a lot about what kinds of questions people have on various subjects.

AnswerThePublic

AnswerThePublic is another awesome free tool that helps you see what questions people are asking about various topics.

Typeform

Typeform is great for creating easy-to-use customer surveys. Typeform has an intuitive design for both you and your survey takers and advanced features like branch logic.

Lookback

Lookback is an amazing user research platform that allows you to perform usability tests and customer interviews on both mobile and desktop apps.

UserTesting

UserTesting is another usability testing platform that gives you a ready pool of users to get feedback from.

Crunchbase

Crunchbase is a comprehensive low-cost startup funding database that is a good starting point for competitive research.

MVP Development Tools

If you are building an app or a platform, the good news is that it’s never been easier to quickly create a prototype for very little cost. Here are some tools to get you started.

Figma

Figma is the industry standard for creating wireframes, designs, and even clickable prototypes for apps and software.

Bubble.io

Bubble is a very popular no-code app builder. There are many of these out there, with different strengths, but Bubble seems to be the most well-rounded and supported one.

UpWork

UpWork is a great place to hire app developers at a low cost. Yes, there are a lot of bad developers on UpWork, but we know of many founders that have found incredible, cheap developers through UpWork.

Investor Research and Lists

There are thousands of venture capital firms and hundreds of thousands of angel investors in the U.S. alone. Luckily, there are a number of tools to help you find pre-seed investors that might be right for your startup.

Crunchbase

Crunchbase is a tried-and-true database of investors, investments, and companies. Unlike other databases like Pitchbook and Prequin that can cost thousands or tens of thousands of dollars per year, Crunchbase has a reasonable monthly subscription fee ($49 monthly if billed for a year).

Signal by NFX

Signal is a more recent entrant in the investor database space and is run by a venture capital firm, NFX. Their investor lists, however, are very helpful. So if you are looking for pre-seed EdTech investors or funds investing in female founders, this is a great place to start.

FounderSuite

FounderSuite is a paid investor database that has over 200K investors. They also allow you to keep track of investors in their CRM, host pitch decks and files, and even send out emails. They also have a free version.

Apollo.io

Apollo is a truly amazing research tool, CRM, and outreach platform. You can find investors’ emails, track them, and reach out to them all in one place.  

Many More

There are literally scores of investor lists and databases. The hard part is narrowing down ones to use, collecting and processing prospective investors, and connecting with them.

Pitch Deck and Presentation Tools

The most important thing to note when creating a pitch deck is that the contents matter much more than the appearance. Still, you can make your pitch deck look great with these simple tools:

Google Slides

Google Slides might seem bare-bones, but you can make professional-looking pitch decks with it. Plus, they have the best collaboration features and user experience out there.

Canva

Canva is known for making good design accessible to all, and they don’t fail when it comes to designing pitch decks. Perhaps the most useful feature is the vast library of templates that give you a head start.

Slidebean

Slidebean is unique in the sense that it is both a pitch deck design platform and a design agency rolled into one. If you really want to step up your design game, why not get an expert designer to help you?

Many More

There are tons of new entrants in the slide design market. Some focus on using generative AI to help, others focus on design features, etc. It might be worth exploring more contemporary options too. Just remember, design is a cherry on top, and it’s the contents that will get you investment, not the other way around.

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Recap of Key Takeaways

While the definition of pre-seed might be changing all the time, the same principles apply as they did in the past to Seed and Series A stage companies.

First, you are in competition with direct competitors for customers and other startups that are vying for capital. The goal is to grow faster than all of them, so investors take notice and bet on you and your company, not the hundreds of others.

Second, it takes time to figure things out–often a lot of time. It takes long to refine your product, so customers love it. It takes months to figure out the right marketing or sales strategy to grow quickly. And it takes months to find investors, foster relationships with them, and get them to invest in your startup.

The first rule of success often boils down to having realistic timelines and staying capital-efficient until your startup reaches an inflection point and growth explodes or you reach a huge product milestone.

Final Advice for Novice Founders

What can you do to ensure your success? Be realistic about timelines, know the milestones you have to reach, continually experiment and learn, don’t give up, and network as much as you can.

Next Steps

If you’re not already doing so, make sure to talk to customers and users as much as you can–perhaps multiple times per week. You need to know everything about them, their needs, limitations, desires, and preferences. Without that, you have almost no chance of crafting a product that will stand out from the competition.

Along with talking to customers, you also need to get in the habit of identifying, reaching out to, and engaging investors. It takes most founders months to build a robust enough network of investors to raise capital, so the sooner you can get started, the more you are increasing the likelihood of your success.

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