Additional details: new drilling rig technology within the energy sector.
I would go to people who understand the space really well - avoid the VCs and go to the PEs and small family offices that invest in the energy sector (ideally in the drilling domain). If they understand your technology and see a product/market fit in your MVP, they will invest - the good investors are flush with cash. Also, the VCs are still closing funds (a large VC just finished a $2.5bn round last week). I am raising investor interest for M&A, and folks are responding to me as well. As Warren Buffett says: "only when the tide goes out, do you discover who's been swimming naked." A good, savvy investor will not pass on a good deal, regardless of timing.
Laura, as often happens with CoFounders and you can see with some of the responses people start speculating. None of these speculating answers have any value because they have not reviewed enough information, because you have not provided enough, as well as being limited to only the scope around them. That simple. I can speculate and completely counter a couple of the answers below and say: I get it, you have a high cost because of R&D and the fabrication process. But that would be just as nearsighted and uninformed as the answers already. Happy to look at what you have. The positive is you have raised money. The negative is that you likely did not properly plan for your financial needs at this stage or had an investor who fell out amidst traunches..etc. I am in Texas...if you have something I can find the investors.
Why would you need that kind of money at an MVP stage? With my previous start-up, we raised $1.7M after running the business (after MVP) for one whole year.
Also, now isn't a good time to be raising funds in my view unless you absolutely need those funds to run your day-to-day operations. Almost every other start-up that I know is losing customers/revenue and it's impacting their valuations, which will be the case with your business too.
My suggestion is to complete the MVP with what you have. And look, it's an MVP so it doesn't have to look pretty, it just has to work. Outsource your tech to countries like India, Romania, etc. who can build this for a decent amount of money. Drop me a message and I can possibly connect you with some software companies I know of.
All the best.
Given the additional information I understand it better. I thought it was software development.
It is costly to develop hardware, but review the suppliers and also push them hard.
You must be fierce in your negotiation tactics and I have had many cases where we pushed hard and could cut tool development costs to 1/5th of the original cost.
There is a lot to do here, but of course there is a limit to all.
It is possible to raise this amount even with the economic slowdown. With the right funding and investment options, any funding target is possible. We could discuss further when we connect or contact me through my email at email@example.com.
I wish you all the best.
If I understand your text correct I am really concerned about how you do your MVP. Can you do the MVP with simple replacements?
If you need that much money I would review the business idea and the way you make your development. The money you get from an investor is supposed to be for expansion and sales and not to build an MVP.
It is abnormal to have $2.5M in an MVP product. You can make pretty good MVPs for far less. This should be possible to do for less than $500k.
Investor's money are not something you get for free and you must have the right people onboard to do this.
I would be pretty concerned about asking for more money at your stage. Is it even a viable business if you need to do a MVP for $2.5m?
First, pay close attention to what @David M says on this and all other subjects. Smart stuff.
Second, investing is not gone, it has just changed. Valuations will be more modest in many sectors and some of the consumer tech is never going to launch. Many over hyped and underfunded companies will just go away. Just as they should.
Third, if you have a unique technology in a critical space that reduces costs or improves throughput, you will be fine. However, you should consider your next investment from potential customers versus straight investors. Craft an agreement where they prepay for the technology at a discount, and perhaps (do not offer at the outset) some small equity allocation. The typical investor wants to see traction to invest, and this covers both aspects.
Finally, your current investors should be approached for the next round. If they have been happy with your performance and use of the MVP money, they will add to their position. It is how angels keep meaningful positions in great startups.
Looks like $1.55m shall be ok for building the MVP, I used to work with oil and gas startups developing both software and hardware (and combined) products in the CIS region and in the US and in all cases the teams were able to make first commercial tests/sales at really early stage spending, not more than $500k.
I'm not criticizing as you really may have "really-really" deep-tech product and you may really need these funds. Just don't build the next Magicleap thing and focus on customers' needs first.
Laura, tend to agree with @DavidM, but would also add being oil + gas the strength of the proposition for MVP and time to commercial revenue could be a factor in whether you can seek bridge/further seed funding so as much as there may be a case for revisiting the MVP plan, there could still be a need to evaluate whether a niche player whether family office or CVC, lets say an investor, possibly aasia based, with an interest might possibly be interested in providing additional funding and if so on what terms, they would obviously need industry specific knowledge.
I would suggest considering Reg. CF funding through crowdfunding, where you can raise up to $1.07M and also create some network through the investment ecosystem. It will take 3-6 months from kick-off through completion but there are certain rules for rolling withdrawals.