Startup Funding

Are we ready to pitch investors?

Simon Guan Founder at HousPro

Last updated on February 21st, 2017

We had this idea almost one and half years ago, then we developed this mobile platform for about 1 year, until today the app has iOS and Android version, released to market for about half year, we have about 400 users are using it now, the feedback is pretty good, the app is stable as well, but to let more people know our mobile platform , we need money to do better marketing. Is this a good time to pitch investors? We are developers and UI designer team, no one is good at this part..... Please advise. Thanks a lot guys.

Grant Olsen Founder RiffBiz.com

February 23rd, 2017

400 users is a great starting point. However, I'd say you're definitely not ready for pitching investors. Ive invested in numerous startups and acquired even more. Almost universally the biggest challenge a startup faces is not developing the product, but finding an affordable and scalable way to acquire customers (also known as find product market fit). There was a similar question the other day about this and my advice is the same: you should identify and then address the biggest risks and challenges in growing your business. In your case, investors are going to see your customer acquisition as one of the primary risks. As an investor, I’d want to see some statistics on your growth and customer acquisition before getting comfortable investing.


I know this may sound discouraging, but it doesn’t mean you are stuck. Google and FB ads may be the way you acquire users, but I suggest you do some research first to understand if it would be worthwhile. I'm building a tool to help you do exactly this (RiffBiz.com). In just a couple minutes, you could plug in some keywords for your idea and get back a summary of the number of searches, cost per click, and even a projection of how much revenue you could make. Check it out and let me know if you have any questions or suggestions for improvement.


In a nutshell, I’d say you’ve done a lot of the product development and are now starting the customer development. Before spending a bunch of money on ads, I’d come up with your list of biggest risks, challenges and assumptions. Then find ways to quickly test each assumption. This may mean spending a couple hundred on ads to validate the keywords, CPC, CTR, conversion, etc. I’d do the same for other acquisition channels (organic search, partnership with sites that have target users, etc.). RiffBiz can help with each one of these. Please take a look and let me know if it is helpful or if there is anything else I can help with. Good luck!

Anonymous

February 24th, 2017

Thanks a lot Grant Olsen. I think you have made a very good point here. We are not good at marketing side. Current 400 users takes more than 2 months to get, the way to get them here doesn't take any cost tho, we are planning to spend some money on google ads and flyers and see which one is better. Should we find a business or marketing person and build a partnership or even equity on that? I agree it is maybe not a good to pitch investor as you mentioned.

Kennedy Nyaga Into ideas that shift behaviours of a generation

February 25th, 2017

Are the 400 users paying customers? The value of paying customers and non-paying customers on the play store is very different. If your business depends on you having lots of eyeballs to make money, then you guys may need some more work before pitching to investors. I use sensor tower to analyse my Play store keywords and it works. You should perhaps try it.

Rogue Startup

February 26th, 2017

Hard to say. If the evidence shows good CAC and a plan to optimize acquisition and retention costs ... then perhaps.


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