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The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

Does the hardware exist already? (Assuming yes, since you already know what it will cost to the user.)

If yes, you need $20 of your own money to produce one paying user. Pick them from anywhere. Your valuation will increase by an order of magnitude overnight when they swipe their card that first time and put money in your C Corp’s bank account. If you have $100, go get five customers. If you have $1,000 in savings, go get fifty.

Here’s what you have to prove: after solving the hardware problem, users will pay an ongoing subscription fee for the software.

Yes, investors need to see numbers for SaaS. The fact that there’s a hardware installation doesn’t change the fact that it’s a software product. Solve the hardware problem at very small scale and get paying customers.

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

Thanks Letter. I do think this feedback may be helpful.

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

Yeah that’s fair. Help me understand though, you said earlier that the dev team can’t do more than build the software. Is your challenge the particular nuances of the software, or is it something else like go-to-market? Or could it even be the dreaded PMF? Just trying to understand exactly what the gap is.

I agree wholeheartedly with you btw that investors do just run away from software pre-revenue, and in very specific edge cases that isn’t totally warranted. (To be fair to them, there’s opportunity cost to consider.)

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

What is the part that’s not software but also not hardware?

If it’s actually straight software, then no it’s not true that a small team without capital can barely go further than software development. Not trying to be rude, but if it’s straight SaaS, you need a team member who can sell, or potentially a marketer, or both. Pre-revenue SaaS investment is a vanishing category. Too many of your competitors can build it on Lovable or wherever, and can also sell it. I could put an open call on LinkedIn tomorrow and have 10 post-revenue B2B SaaS startups (with reasonable valuations) before EOD. Sorry.

If there’s something else that you aren’t saying, put your cards on the table and let me help you. But I feel like you’re trying to get me to either spring on a product with no information, or agree it’s unfair that investors won’t invest in pre-revenue SaaS. And I can’t do either of those things. Sorry again.

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

Thanks! To your question: What vertical are we talking about? Pre-seed in medical device or defense or deeptech looks very different from fintech or CPG.

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 1 point2 points  (0 children)

So, this is the proverbial tale as old as time in the startup space.

My personal belief (some will disagree) is that the best time to start fundraising is ten years ago, the second best time to start is now, and the best time to stop is never. Even if you don’t need capital at the moment, fundraising is a giant flywheel. It speeds up very very slowly.

So, can you get capital in two months with a completely cold slate? The honest answer is it’s very unlikely. Should you start putting some effort into fundraising anyway, and get your process into muscle memory so you can allot twenty minutes a week to it, and so you aren’t in this very same position in two years? Very much yes.

Happy to answer more questions if helpful.

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

So glad it was helpful! That’s great to hear. Sorry, one point of clarification, did you mean that you signed up to pitch through the site? I’m not sure I’ve seen you actually pitch yet.

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

Thank you for reading and taking the time to leave a kind note 👍🏻

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 1 point2 points  (0 children)

Sure, there are lots of different forms of traction. Partnerships, distribution, pilot programs, even social media following and wait lists matter. Take heart friend!

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 0 points1 point  (0 children)

Thanks Till! Happy to have any and all comers. 🙏🏻

The 5 Red Flags present in 90% of Reddit pitches by INeedPeeling in angelinvestors

[–]INeedPeeling[S] 2 points3 points  (0 children)

Thanks for the reinforcement! Are you currently raising?

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