In startups you want to use your limited seed capital to produce tangible things that VC’s /angels can look at, get impressed and invest. ( This assumes you want VC/angel investment)
These could be prototypes, beta customers, key business development deals or letters of intent.
At Eko we have just signed a letter of intent with a large bank for our pilot. This is likely to make it much easier for us to move forward on many fronts.
People recognize that it is not easy to get an LOI signed by a large company which is why if you can get that done it gives a lot of people including the startup team a lot of confidence to climb the mountains that lie ahead.
At Eko we managed to do this in a month after formal incorporation. If we can do it and LOI’s are relevant in your startup then so can you.
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For a consumer internet venture if you are trying to attract seed funding it may be enough to just have a prototype and just say 50 invited users who give both critical and positive comments. That could be the equivalent of an LOI. A better word would be a working prototype.
Terrific Advice. Thanks Sanjay.
It will be very useful to know things that a funded/unfunded entrepreneur should focus on during the first 90 days of the venture. Anyone would like to provide inputs..?
For a consumer internet venture, I think having 5000-10000 users would be much better.
But what can substitute a LOI for a consumer internet venture ? expression of interest from 100-500 users ? all ready to be beta tester .
will it give a bargain power to team of first timers ?
Please guide.