Investable entrepreneurs don’t simply go into the battlefield without making sure they have everything they would need to convince potential investors and close a deal. They ensure this is the case even at the earliest stage of fundraising for their business, that is, when raising for pre-seed investment.
It’s not enough to be a go-getting entrepreneur with a fabulous idea. Before investors will channel their hard-earned finances into your idea, they’ll expect to see proof that it actually works. Investors want to be sure they’ll eventually be rewarded with a healthy return on their investment. If you go into a pre-seed round with nothing to offer but an intriguing pie-in-the-sky opportunity, you’ll be guaranteed to leave the round empty handed.
On the other hand, if you go into the pre-seed round armed with all the data you need to prove your concept (i.e., you’re able to show investors market validation your idea will be commercial and successful in the real world, not just on paper) you’ll substantially increase your chances of attracting their support and closing the deal.
That’s because proving your concept:
- automatically takes a huge risk out of the investment opportunity you’re offering them, and;
- makes taking the decision to invest in your proposal as easy as possible.
This is one of the crucial differences between being an investable entrepreneur with a must-have product and being an entrepreneur with a great idea who’ll never get it off the ground. Investable entrepreneurs do all the homework necessary to prove their concept and make investing in their proposal a no-brainer.
What does ‘proving your concept’ mean?
- The investor wants to see your concept is in demand.
- They’ll expect you to show evidence that your product or service solves a genuine problem, and that the problem is big enough that customers will want to pay you to solve it.
- They’ll want to be assured that customers will pay a high enough price for your product to generate profits and that enough customers exist to give them a return on their investment.