Chicken and egg thing, indeed. It’s difficult to raise funds when you yet have no revenue, it’s difficult to have revenue without a product. And it’s difficult to have a product and a revenue stream without a company. And finally, it’s difficult to have a company without funding.
Bootstrapping, unlevered out of pocket funding, is either Vegas roulette or Russian roulette, but not many creators or founders can do it, or do it more than once should the venture not get traction immediately.
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Linas BeliūnasNailed it! Legendary VC & a16z co-founder Marc Andreessen explains how to raise venture capital as a first-time founder:
“If you’ve never founded a company before and if you just have a plan, it’s very unlikely that you’ll raise from top-end venture capital. However, once in a while, you get somebody who’s not done it before, but they’ve already built the product. A classic example of this would be Facebook. Mark Zuckerberg had already built Facebook at Harvard by the time he started the company.
The Google guys had built the Google search engine at Stanford. So if you’ve already built the product, then you have a calling card to be able to raise money for a venture, because you you already have something that’s real. So the best thing to do as a first-time founder is actually to build a product” – Marc Andreessen
But what if you don’t have a product yet? Marc’s advice still applies – just start building something:
– If you already have a product: Highlight user traction and growth metrics. Show that people actually want what you’re building.
– No product yet? Focus on building a community. Think email lists, Discord servers, online forums – anywhere you can gather early adopters and show proof of demand.
– No community either? Develop your (personal) brand. Establish credibility. Share your expertise. Be vocal about the problem you want to solve.
Investors fund momentum – whether it’s demonstrated by actual usage, a passionate user community, or an influential personal brand.
If you can prove you’re onto something exciting, your odds of raising capital go way up.
