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The Funding GameDavid Tran | Co-Founder / COO of NhomMua.com
Do you need the money?
Funding important for scaling, intensive capital needs, accelerating growth
Funding much easier to get after proving concept (valuation also higher)
Not all startups need outside funding
Advice: Go as long as you can without asking for money
GoPro
GoPro
HD sports video cameras
Low cost HD Wearable Sports Camera
Sold shells from VW bug to get 10k USD for first patent
SmugMug
SmugMug
Multi-gigapixel photography
Like Flickr but high quality
Self-funded
PCH
PCH
Located in Shenzhen, China
Huge supply chain company
Needed $200k USD to build circuit boards
Banks, VCs, turned them down
Founder Liam Casey asked factory to build it for him first
Offered his passport as collateral
Do you need the money?
Hustle, hustle, hustle
Build prototype, demo, proof of concept before asking for money
If possible, find a way to acquire customers, get real world data, then seek money
If cash-flow is business supporting, may not need funding ever
Looking for money
Ideas are a “dime a dozen”
Investors want to know your team can pull it off
Management team covers all needed areas to succeed Technology / Development, Marketing/Sales/Business
Prove the concept with real customers Go out there and get customers with your product “Pivots” are essential | Your original ideas rarely work
DropBox
DropBox
Total VC capital funding of 257.2 MM USD
Valuation possibly > 1 Billion USD
Annual revenue > 240 MM USD for 2011
Very interesting method of getting initial funding
DropBox
Founder Drew Houston originally use “Customer Development” methodology by Steve Blank Customer Development process Talking to customers Using feedback to develop and refine product
Then, Drew Houston had an animated video created of a product that did not exist
Shopped the video to investors as “alpha version” and got funded … then built the product.
Summary
Ideas are just ideas
You need to execute and test the market, to know what’s out there
At least have working prototype to show people, get feedback loop (Customer Discovery)
Real data (proof) trumps all funding at that point is just to scale a working model