I have an idea about a machine but I don't have enough knowledge to make a prototype. I will have to hire an engineer with masters/PhD to make a prototype, which will cost a lot. If i try to learn everything and make a prototype on my own, it will take me about 2 years to make a prototype. So should i go to VCs to get funding to make a prototype and hire an engineer to make prototype faster or work on my own and than go to VC to get funding?
In fact, if we have paying customers; the, best!
The best way for you is to find a technical co-founder. Or to hire an employee for lower salary but with some equity option.
Usually VC do not invest in prototyping. You may try to find an angel. But if you finish a prototype first you will have a much better position.
And do not forget about your market. You have to research it too. When you have a prototype you can also test a product-market fit. But it may depend on exact market type and type of machine you build.
You can make a crowdfunding campaign for the prototype. But I think that the best strategy is to get a good engineer as a business partner. In the future you will need good engineers to bring the idea/prototype to a real product that really sells, with good quality and right price.
VC are not looking only for ideas, they buy teams: dedicated people to transform ideas into reality.
If the idea is so good and simple to transform into a product, just make a patent and go for the royaltie, or sell the patent for a good amount. But this take time and write a good patent requires experience and money too.
Man that is a steep climb. I try to vet ideas within 3-6 weeks or less. If I can't get a lineup of potential customers willing to buy in that time frame then the idea may be too big. If you have partners or existing business and you know you can pivot into it then you can possibly make it work. If you are a solopreneur, though, I would try to carve it into a much smaller idea and sell that first. If it's a machine, are you trying to automate something? Why not sell the service first and do it manually. If you can sell that NOW then do it. As long as you can break even (or close), you may be on to something. Then the machine becomes a logical next step and you can get funding. Why? BC you are actually MAKING $ and it's just a scaling equation then. Much more palatable to investors at that point IMHE. Good luck!
It's really hard unless you're a successful serial entrepreneur. I guess bootstrapping would be your best bet here.
You can try compensating your PHD engineer friend with sweat equity, a.k.a making him/her your co-founder.
Or you can hire the PHD as CTO and build simple PoC / pre-MVPs and do some early marketing to see if your potential customers like it or not, and iterate / improvise from there.
Another way is to crowdfund your idea, if patent is an issue (since you're building a machine) you can file a provisional application prior to the campaign, which gives you 12 months to raise what you need.
@krushi I am going through the a similar situation. My mentors are VCs and they have already presented me with opportunities to pitch for investment and here are my takeaways:
In my case I went through an acceleration program, proved that there is a need in my market by talked with my potential customers and I am going to get the money by doing a crowdfunding campaign and I am applying for a no interest loan. Loans are the worst thing you can do but I can pay for it with my income.
Hope this helps
There is no simple answer. One thing you can do is find someone who really needs your invention and ask them to help you. File for a provisional patent first if you can afford it. You will need a compelling presentation. Some important things to remember: keep your eyes open for follow on opportunities along the way and be passionate. I'm working on an exoskeleton project and I have many amputees lined up to provide all kinds of help including funding. Invest in humanity and happiness. It's the only way to live.
You dont need prototype for searching funds. MVP is also good, but minimum viable product can be landing page with well explained what your product do.
And if feedback is positive, you collect more than 10k or 20k leads ... with positive reaction.
That segment can be great metric for any VC
Have Fun :)
I think you are not ready to attract VCs; they need to see good traction, growth potential and some real metrics in your business model.
Even attracting seed money will be difficult if you don't have a prototype, and don't have the right people on board that can solve the problem.
This is one of the first rules of entrepreneurship - you need to have the skills to solve the problem on the founding team.
My advice would be to find a technical co-founder that shares your passion in solving the problem you have identified. The dilemma here of course is that finding and attracting the right co-founder to join your venture from the start is really difficult!
More advice (and a handy infographic) from my blog:
You can get a consulting engineer or if ur confident of your final product, you may ask an engineer to partner you .