Millions of startups are formed each year, worldwide. For every one investment made, venture capitalists go through at least 400 product portfolios. When it comes to angel investors, this number comes down to 40. So be it, 400 or 40, the competition to get angel funding or venture capital infused into your startup is quite big.
This can lead to an obvious question any startup would ask themselves: How can I score a funding? Well, we have good news for you. There is a great way in which you can up of your chances of being spotted and chosen by an investor…and that is by building an MVP.
An MVP helps investors visualize your product and not just your idea. It is a base product that reflects your idea through a skeletal framework which is fully functional and can be tested on the market. One of the many benefits of an MVP is that it requires minimal investment, but one which can help you gain way more venture funding and help your product take off.
Read complete guide on What is Minimum Viable Product?
Why a minimum investment into an MVP necessary?
By investing in your product idea you are giving a clear sign to the investors that you are serious about your product and you are committed to its cause. Investors would only put in their money into a startup when they are convinced that the founders know what they are doing; and they too have made some monetary investment into it. By investing into an MVP you:
- Get a base product (and not just an idea) to take to investors
- Show investors that you are serious about your commitment
- Demonstrate that you trust your product enough to put your money into it
Cash inflows attract investors
Investors will put their money into startups which they believe will bring in the big bucks. So, if your MVP is already in the market and is generating sales or even consumer interest, it adds further brownie points to your startup to being considered for funding. Once, your startup receives funding, it will add more customers to your list and thus the cycle goes on. An MVP can play a fundamental role in getting your business to take off. It gives you the throttle you need to push your business of the ground while the funding acts as fuel.
A startup with ability to deliver attracts investors
When you are a startup looking for funding, just having an idea isn’t going to bring in your business’ life blood. The investors need to see that you can work on your idea and deliver an actual product that they can invest in. An MVP shows them that you are not just conceptualising your idea but have already executed a base product.
Your idea is your brain child. It is important to you. However, it might be difficult to help investors see value in something abstract and try to understand its worth, the way you see it. There is nothing better than presenting them with an actual framework of your idea which can be bent, twisted, and tested on. You will be surprised to find out, how much having an MVP improves your chances of getting funded.
If you are ready to give your startup the throttle it needs, we will be happy to work on an MVP for you. We build you an MVP in a matter of days (30 to be exact) and you can have free wireframes for your MVP on your table within just 5 days. Click here to get started.