Need some advice getting funding for a prototype

[Aspen]

Hello all,

I've decided to start a business a few weeks ago for a new type of product. I cannot give details of it here, however, I am in the process of making a prototype of it by myself, and have allocated a starting budget and business plan for this prototype. That said my funds are limited so at some point I need to start looking at getting funding to advance the prototype and build a final design.

I am very new to this world, are there any startup founders on here who have experience with the process of building a prototype and securing funding? I have done some research on the funding and commercial side of it but I have been very focused on building this prototype recently so I have not been able to put much time towards it.

Can someone give me good advice on where to start as far as setting up an operational business model and where would be a good place to start funding wise and to begin building a team for this project? Preferably I would appreciate answers from people who have experience with this kind of thing. I live in US but I have posted this in Pakistan Economy because I am trying to get an economic perspective.

Kind Regards

 

[Gul_Khan_Peshawar]

I know a bit about different stages of building a startup. It may not be easy to give any advice without knowing tbe industry and idea. However as a general rule, it is very difficult to get funding on idea stage if one doesn't have previous successful exits or a proven business model with customers already using the product.

I would probably hire someone in Pakistan with good American/British accent and have him cold call into potential market (costs between PKR 50k-100k/month). Having few signed contracts with future customers will increase your own commitment and confidence in the idea, in addition to providing a stronger case for potential investors.

 

[StormBreaker]

Hello all,

I've decided to start a business a few weeks ago for a new type of product. I cannot give details of it here, however, I am in the process of making a prototype of it by myself, and have allocated a starting budget and business plan for this prototype. That said my funds are limited so at some point I need to start looking at getting funding to advance the prototype and build a final design.

I am very new to this world, are there any startup founders on here who have experience with the process of building a prototype and securing funding? I have done some research on the funding and commercial side of it but I have been very focused on building this prototype recently so I have not been able to put much time towards it.

Can someone give me good advice on where to start as far as setting up an operational business model and where would be a good place to start funding wise and to begin building a team for this project? Preferably I would appreciate answers from people who have experience with this kind of thing. I live in US but I have posted this in Pakistan Economy because I am trying to get an economic perspective.

Kind Regards

Share your business plans on social media startup specific groups, A friend of mine attracted some investment for his startup related to perfume making which he eventually cancelled due to some stupid reasons.

 

[313ghazi]

I can't remember the name but there is at least 1 hedge fund investing in Pakistani startups. Have a Google they were in the press recently.

http://47.ventures/

https://www.crunchbase.com/organization/sarmayacar

https://talktopoint.com/startup-investors-pakistan/

Also this might be a long shot but contact @MirMAKOfficial on twitter - he might know someone and also Azaad Chaiwalla - he has a forum for business too.

 

[Syed1.]

I think under the Kamyab Jawan program there is a Startup Pakistan program that gives interest free loans after reviewing your business plan, maybe go through their website. Good luck

 

[Aspen]

I think under the Kamyab Jawan program there is a Startup Pakistan program that gives interest free loans after reviewing your business plan, maybe go through their website. Good luck

I am living in US so I don't know if Overseas Pakistanis are eligible for that. But I will check it out

 

[Syed1.]

I am living in US so I don't know if Overseas Pakistanis are eligible for that. But I will check it out

No unfortunately it's only for Pak residents

 

[Aspen]

I know a bit about different stages of building a startup. It may not be easy to give any advice without knowing tbe industry and idea. However as a general rule, it is very difficult to get funding on idea stage if one doesn't have previous successful exits or a proven business model with customers already using the product.

I would probably hire someone in Pakistan with good American/British accent and have him cold call into potential market (costs between PKR 50k-100k/month). Having few signed contracts with future customers will increase your own commitment and confidence in the idea, in addition to providing a stronger case for potential investors.

Is it worth hiring someone to run through my business plan? I'm thinking I should probably patent the idea before getting too deep into it. I am also trying to understand what exactly my relationship with possible suppliers is going to look like since it is already becoming clear to me that a number of components in this prototype are not things I can easily make myself. For example, I need a proximity sensor connected to a hydraulic actuator as a part of my prototype. I am most likely going to need suppliers for this. But I am not sure how to start that conversation with suppliers for a number of reasons such as how much information I have to give suppliers about my idea without giving my idea away. Also, will getting suppliers in the first place be a problem? Then I have to figure out rates and pricing with suppliers. But right now I am just in prototype phase so I guess main focus for me right now should just be getting a working prototype and then figuring rest out later.

 

[Gul_Khan_Peshawar]

Is it worth hiring someone to run through my business plan? .

I don't think you'd need to share your complete business plan with the guy. You can give him very specific instructions i.e. Who to target, what to pitch etc with precise follow up actions i.e. after gauging a certain degree of interest, schedule an appointment with yourself etc.

Least you can expect from this activity is an idea about the demand in market. If done properly, you may end up finding a good viable/sustainable sales model, which matters most.

But right now I am just in prototype phase so I guess main focus for me right now should just be getting a working prototype and then figuring rest out later.

I agree, first step is getting a working prototype. Next would be product-market fit i.e. customers are ready to pay and use the product. In my opinion imvestment on patent can come later because a single patent is not enough in most cases, you need multiple patents.

I am also trying to understand what exactly my relationship with possible suppliers is going to look like since it is already becoming clear to me that a number of components in this prototype are not things I can easily make myself. For example, I need a proximity sensor connected to a hydraulic actuator as a part of my prototype. I am most likely going to need suppliers for this. But I am not sure how to start that conversation with suppliers for a number of reasons such as how much information I have to give suppliers about my idea without giving my idea away.

These are purely engineering challenges and I may not be able to comment until I've an understanding of the product. However a generic strategy in such cases where you fear of IP theft is that you use multiple suppliers to procure different components. Assembly, if possible, can be done at a very different place.

 

[Aspen]

These are purely engineering challenges and I may not be able to comment until I've an understanding of the product. However a generic strategy in such cases where you fear the IP protection is that you usemultiple suppliers to procure different components. Assembly, if possible, can be done at a very different place.

That's kind of what I was wondering about. Does it even make sense to worry about IP?

I've always wondered about this because if supplier doesn't have a clear picture of you are trying to make, it can be kind of hard to get the right parts for it.

 

[Gul_Khan_Peshawar]

That's kind of what I was wondering about. Does it even make sense to worry about IP?

I've always wondered about this because if supplier doesn't have a clear picture of you are trying to make, it can be kind of hard to get the right parts for it.

That actually is one of the challenges and you have to maintain a delicate balance. There can be 2 approaches to address this challenge in my opinion:

1. Don't fear, just go for it and make a perfect product and focus on building the business. In other words, sell sell and sell. There millions of brilliant ideas that have failed due to lack of good commercialization strategy. And there are millions of very ordinary ideas that are mega success due to good commercialization.

2. If you think you want to protect the idea first and think about commercialization later, then put an extra effort in writing specifications document. More detailed you are in your specifications, better quality product your suppliers will build for you. You won't have to share the complete details with them if different suppliers build different components with exact specifications as you give them.

If I was in this situation, I wouldn't worry too much about IP protection at this stage and juat focus on building a great product and selling it.

 

[Aspen]

That actually is one of the challenges and you have to maintain a delicate balance. There can be 2 approaches to address this challenge in my opinion:

1. Don't fear, just go for it and make a perfect product and focus on building the business. In other words, sell sell and sell. There millions of brilliant ideas that have failed due to lack of good commercialization strategy. And there are millions of very ordinary ideas that are mega success due to good commercialization.

2. If you think you want to protect the idea first and think about commercialization later, then put an extra effort in writing specifications document. More detailed you are in your specifications, better quality product your suppliers will build for you. You won't have to share the complete details with them if different suppliers build different components with exact specifications as you give them.

If I was in this situation, I wouldn't worry too much about IP protection at this stage and juat focus on building a great product and selling it.

Thanks for the advice, really appreciate it

 

[nahtanbob]

That's kind of what I was wondering about. Does it even make sense to worry about IP?

I've always wondered about this because if supplier doesn't have a clear picture of you are trying to make, it can be kind of hard to get the right parts for it.

you can sign NDA with your supplier to keep details confidential

 

[Armchair]

Aren't you the guy sharing fake news from "Masdar News" an Iranian BS outlet? Perhaps you can start a business of re-badging Iranian cr@p and trying to sell it in Pakistan.

 

[Aspen]

you can sign NDA with your supplier to keep details confidential

Good idea