HACKER Q&A
📣 badrabbit

How to get initial funding for an idea?


I have a few ideas I think are really good. My job pays me well but the better ideas I have cost a lot of initial money to develop even a small proof of concept. As I understand, VC's want some proof of concept and market acceptance testing before a seed round. Banks require some proof of business proposal validity as well. I have no rich friends or family, how do I get to the stage where I can even think of applying to YC or other VC firms?

To be clear, The ideas I have in my opinion are not high risk (worst case you break even after a few years).

Apologies for my ignorance if there are better sources out there. Asking here because I have received valuable advice on HN from asking similar "noob" questions.


  👤 soneca Accepted Answer ✓
> "To be clear, The ideas I have in my opinion are not high risk (worst case you break even after a few years)."

It's good to be optimistic, but not naive. The worst case is that none of your ideas will ever generate a single dollar of revenue. Actually, I would even say that the most likely case is that you will never reach break even.

With your naive assumption you can get into unnecessary debt and now the worst case is that you lose all your financial reserves.

> "the better ideas I have cost a lot of initial money to develop even a small proof of concept."

I would think very hard to find a way to validate these ideas without that much of initial money. I am honestly don't trust your judgement now that it is impossible to even test without a lot of money. But if that's really true, it means that you want to build something that requires a lot of deep expertise and/or infrastructure (like a new self-driving drone or a new drug). The only people who get money to work on these kind of projects are researchers within a big company or entrepreneurs with an impressive track record of success (think Elon Musk).

So maybe these ideas are not for you.


👤 _JC_Denton
Rather than build your idea, which you say requires a lot of money, prove that people want to pay for it. You CAN do this without building the idea.

This will force you to get out there, actually talk to potential customers, and sell it. This is one of the hard parts of executing on an idea.

I know one entrepreneur in your boat who recently cold outbounded with a PowerPoint and some design mockups, and managed to get a number of LOIs signed from buyers in his target market. That proved to investors that 1) people wanted it, and 2) he could sell it. He raised a non-trivial sum from a known VC firm.


👤 coderintherye
Validate your idea by getting users. Site building tools are ubiquitous now if you want to test out anything ecommerce.

For everything else, you can use a Google Form or just go out walking around town surveying people and seeing if they'll sign up to your list based on telling them your idea.

Ideas are not valuable unless you can show that you can execute on them and you don't need much money to show that, at least to start.


👤 kohanz
Have you talked to a lot of people who would be the customers/users of said "ideas" in an attempt to validate them? Remember, casually asking family, friends, or co-workers about such things is very unlikely to provide real feedback.

Highly recommend this book on the topic: http://momtestbook.com/


👤 ishwarjha
Initial funding will come from yourself, friends or family. If you are trying anywhere else it would be a waste of time.

👤 muzani
IMO, you should always sell the product before you have it. Prove that people are willing to throw money at it.

There are a few tricks you can try - you can put up a shopping cart that crashes into an 'out of stock' dummy page and then track the number of people adding to cart. You can put up a few real world banners, track how many calls you get, then tell them that the system is down. You can visit people with a powerpoint presentation.

Don't be a tire kicker though. Just do it as if you're going to do it, then move fast to secure it.

Another easy trick is to look at what people have hacked together. Everyone has a competitor. Yours is likely an excel sheet somewhere. The competitor for the first car was the horse. The competitor for combat planes were balloons and zeppelins.


👤 vpEfljFL
If your idea is not labour intence (e.g. bringing new drug to the market) then you can do mvp within weeks or several months depending on how much corners you can cut.

If you can't code then probably you can save couple of thousands and ask for help from someone else (e.g. hire overseas labour from low cost of living areas to build the mvp for you).