Skip to main content

Which Ideas Are Fundable and Why Most Are NOT

January 31, 2022

Many entrepreneurs think that if they have a brilliant idea, they can easily get funded. They immediately embark on a fundraising journey, pitch at multiple investor meetings, and are flabbergasted why, to their genuine surprise, the answer is consistently “NO”.

What is the problem? Why is it so hard to raise money even if you have an idea that can be worth billions? “CAN” is the key here, as we discuss in this article and the corresponding video.

The concept of “great craftsmanship”

In his interview, Steve Jobs, a visionary inventor and entrepreneur, discusses what it takes to transform disruptive ideas into ground-breaking products. He introduces the concept of “great craftsmanship” – a key ingredient to make the transition succeed. It further follows that just because you have a great idea, it does not automatically mean that you also have the great craftsmanship required to create a great product based on that idea and to build a great company.

That is precisely why investors are reluctant to give you funding just based on an idea. You must prove you can execute first.

Who can raise money on an idea?

An experienced entrepreneur.  If Steve Jobs walked into any venture capital office and said: “Give me $10M (or $100M), I want to work on a new product”, he would easily get it. In fact, VCs would be fighting over who gets to invest in Steve Jobs’ next venture.

The reason is that he has a proven successful track record of launching and scaling companies. He understands what it takes, the processes that must be put in place, how to hire the right people, and how to react to market feedback. In summary, he knows how to get things done.

What about the rest of us?

The rest of us must first demonstrate to investors that we have this great craftsmanship to make the magic happen and make them a lot of money.

You can show investors you have great craftsmanship by creating a stellar MVP, writing a thorough business plan, and generating product traction.

What is an MVP? – A glimpse into your craftsmanship as a creator.

What is a business plan? – A glimpse into your craftsmanship as a CEO.

What is product traction? – A glimpse into your craftsmanship as a marketer.

Conclusion

While your ideas may be great, even brilliant, they alone are not enough to secure funding. 

  • About Author

Victoria Yampolsky, CFA, is the President and Founder of The Startup Station, a comprehensive resource for modeling and valuing early-stage startups. She evaluates the financial feasibility of business models and specializes in the financial modeling and valuation of pre-revenue companies. She also created a finance curriculum for early-stage founders and launched The Startup Station’s educational program in 2015. Since then, more than 1,000 founders have attended her online and in-person finance classes and learned the basics of financial modeling, valuation, and startup financing.

Previously, Victoria worked for the Deutsche Bank Research Department and performed IT consulting for CapGemini’s Financial Services Division. Victoria holds a Bachelor’s Degree, Cum Laude, in Computer Science, with a minor in Mathematics, from Cornell University and an MBA, with honors, from Columbia Business School. Victoria is also on the Advisory Board of the Computing and Information Science (CIS) Department of Cornell University.

Still have questions?

We are happy to talk to you. Book a FREE 30-min consultation now by pressing the button below and, as a bonus, we will send you a COMPLIMENTARY financial health checklist.

Press the button above to accelerate your fundraising process. We will help you create a defensible valuation and financials, investors will take seriously!