How You Can Get An Investment Based Only On An Idea?

hat in hand

Yes, VCs do invest in ideas, but it’s really, really, really hard to get an investment based on an idea. And I think it’s getting harder now then when I did it.

Having said that, I am working with an entrepreneur that raised VC funding this year based on an idea. How did he do it? It’s the same things you’ll need:

A. He had a track record of success.

B. He had a great idea.

C. He had the proven skill to execute on the idea.

[Do you want to grow your business? Maybe I can help. Click here.]

You will need all three (track record, great idea, and proven skill) if you are going to get VC funding based on an idea.


Even then, it’s not going to be easy to raise money based on idea. In fact, it’s so rare to raise money based on an idea that I am reluctant to say it’s possible. You really have to be perceived as being an expert with a proven track record to raise money based on an idea.

So you likely do not fall into that category. Therefore, you will have to prove at some level you have a viable business.


Most businesses are not funded by VCs.


99% of all businesses are not funded by VCs. And starting out, your business will not be funded by VCs either.

You’re likely to get funding from friends and family to start with. Maybe you can get a small business loan. Maybe.


You’ll do what most people do: bootstrap.


As your business starts showing some promise and (hopefully) starts growing, maybe you can move to angel investors to accelerate your growth.

You’ll need to show revenue growth and customer growth to get interest from investors. Here’s what you don’t need to show:



You need to spend money to grow fast.


Bootstrapping usually inhibits your growth because you only have a small amount of cash to support the business. The business goes away if you don’t have any cash left.

However, taking on venture funding allows you to grow at a much faster pace. The trade off is you give up a piece of your company to investors.


Not all businesses are suitable for venture funding. In fact, most businesses aren't suitable for venture funding.


You have to be in a space that’s of interest to VCs otherwise you will never get VC funding. Make sure to develop a financial plan before you seek funding.

Then you’ll know exactly how much money you need to get to cash flow positive. Just as importantly, you’ll know how much funding you’ll need for your business.

For more, read: Five Reasons Why You Should Avoid Raising Venture Capital


Do You Want To Grow Your Business?  Maybe I Can Help.  Click Here.


View original post on Quora.

Picture: Depositphotos.