You Donâ€™t Need A Prototype To Raise A Seed Round | TechCrunch
Ottway Ducard stashed this in VC
But today, it is the very rare Internet software deal that has meaningful technology risk â€” other than scalability, and if you have the right founding team you have to bet they are going to figure that out. So the only risk that could be removed from a typical seed deal by shipping a prototype or 1.0 release would be evidence that the company is on to the â€śrightâ€ť product that consumers will love.
But does your average investor have strong enough product and design chops to make a call on a productâ€™s ultimate chance for success by seeing a 1.0 product? I donâ€™t think so. Few professional seed investors were previously a superstar product guy or gal. (Yes, there are a couple of exceptions, but just a couple).
Also, and Iâ€™d argue more importantly, youâ€™re missing the point of that first product. Rarely is the first product going to have the magic necessary to grab users and draw them in. Rather, it is the first step in a process of understanding your users and learning what it is they really want and need. In many instances, you actually learn along the way that your idea isnâ€™t very good, and that what your users want is another product altogether.
Finally, if you have the right founding team, an investment is based far more on their product experience and/or talent than on what the very first iteration happens to look like.