Crowdfunding...you need to know what this can offer!

Crowdfunding (google it, and at least check out what wikipedia says about it) has been around for a while, more commonly known as a way to raise capital for musicians, disaster relief, and other charities.  But crowdfunding can successfully be used to raise capital for a high-tech startup as well.  A company I'm currently working with recently raised over $24k this way!  And their goal was $20k.  They did this through IndieGoGo.  But wait, there's more to this.  Not only did they get $24k and kept 100% of their equity, they now have hundreds of eager consumers, who contributed small amounts of money (for a T-shirt, or a mock-up prototype, etc.), just waiting for their product, and giving them early feedback on design features, etc.  Pinch me...am I dreaming?  No losers found here.

Here's an outline of the best 20-minute investor pitch you could make!

The most important items to emphasize in a 20-minute investor pitch are:

1) Team – you guys have done this before, know the space well, and are confident (but not cocky) in your execution.  There also are no holes in your team for the next 6 months or so.

2) Market – you have a solid understanding of the market potential and dynamics, and have a solid go-to-market strategy.

3) Product – you’re not in R&D, you’re way past prototype and over the “technology risk hump.”  Also, you’re not just a hardware play…you’re a systems play:  a complete solution for those wanting/needing a complete package for <whatever you do>.  Don’t emphasize the hardware aspect (if you have one) too much…this will scare some investors away…focus on the complete, “shrink-wrapped” solution that you provide.

4) Sustainability – you’re not a one-trick pony…you have a product family.  You also have IP, but you’re not resting on just that…your product roadmap is solid with products that go beyond just the first product, which will keep you ahead of anyone trying to do the same.

5) Customers/Partners – you’ve already got a list of companies wanting to buy the product.  And, perhaps you have a partner interested in you…a possible early exit for investors.

6) Competition – who’s out there already in this space, and how are you so much better; how are you going to keep knock-offs from cutting into your share and/or margins.

7) Financial sustainability – ASPs, COGS, margins, realistic growth, cash flow, minimal need for and size of future rounds.

8) Use of funds – this round will take the company into initial production with revenue not far behind (right???).

9) Terms – make them attractive

Overall, you want to give the investors that “I can’t miss this deal” feeling substantiated by the content of the slides you make from the outline above.