[Fundraising for Startups] Lesson 2: Don’t approach without a prototype (or previous success).

I'll make this quick: Ideas. Don't. Get. Funded.

I've been investing in startups for almost a decade now and I can tell you that any pitches that start with "I have an idea..." will NEVER get funded. By anyone. Ever.

This is what gets funded. (Yep, I'm an investor in this company.)

I’m sure we all know “idea guys” – people that have been talking about an idea for a long time but haven’t ever built it. Don’t be that person.

At the very least, hack together a “ghetto, but useful” prototype and get it in front of users. Better yet, get that prototype in front of potential customers.

In the worst case, that shows me that you can hustle.

In the best case, you've gotten at least one person you don't know to buy something from you and that shows me you know how to build a business. (If you're wondering, I wrote a check to )

NOOB MISTAKE: avoid outsourcing any of your early work unless you have solid experience with that model. You'll probably pay too much and, worse, you'll scare off a huge set of investors that avoid early stage companies that outsource too early.

Since you're planning to raise money, you always have to remember that your goal is to be the least-worst pitch that an investor's heard in any given time period. You don't have to be the best.

Let that sink in for a minute. I'll ping you tomorrow.

-P