funding, lean, valuationPrior to having a minimum viable product and paying customers, what forms of business validation are most likely to get investor interest and how are these types of validation valued by investor?
Proof of market knowledge - an investor may not have great knowledge of your market. It’s up to you to convince them that it exists and is a viable source of profit.
Well thought out numbers - investors are parting with real cash and they don’t want to give it to people who haven’t bothered or aren’t capable of thinking through the numbers carefully and realistically.
Gaping holes in either of the above will not help. Work out the costs and likely prices well and honestly and get hold of some business plan templates from investors which will ask you the kind of hard market knowledge questions you need to answer.
Passion for your product - this is crucial. It sounds fuzzy, but investors invest in people as much as products. They don’t just want a product, they want a product and people they can feel confident can deliver that product successfully.
Track record - though this is not as important as the above - if you lack the above for the current project any past success isn’t going to help - it still helps if you have experience or at least one of you does. Remember experience of failure should not be hidden, as you will have learnt plenty and will be in a better place than a rookie.
Potential sales - data gathered from market research that shows a good number of people interested in buying the product should it exist. For example, using adverts to funnel people to a sign up mechanism and seeing how many actually bother.
These things are actually as important than an actual product. Often investment is given to prototype something or to prove a concept. These levels of investment are small and are used to see whether or not a product is worth seriously marketing.
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