[avidanr]

As a hardware investor (founder of Root Ventures, mentioned in the article), I'd be careful to differentiate between funds raised from investment vs kickstarter or crowdfunding. At the most basic level, $'s raised via kickstarter should sit on your balance sheet as a liability. There is an expectation that you will deliver product equaling the amount you raised. Of course there are margins baked into the product price, but VC money is truly there for business development. We have invested in several very successful companies who have had millions of dollars in successful campaigns on kickstarter. Each and every time, the KS money is earmarked for delivering the promised product (tooling, Mfg, shipping), while the VC money is used to build a company (recruiting, office space, salaries, travel).

[tarikjn]

What stage do you typically invest at? pre-Kickstarter? post-Kickstarter? pre-manufacturing prototype? Working prototype? How about hardware startup accelerators, how should a startup choose between talking a VC or an accelerator and at what stage?

[avidanr]

Ok. I'm gonna try some stream of consciousness answering...

I always need to see someone having done some difficult technical development. As an engineer myself, it makes my job so much more fun (i do code/design review with every startup i invest in!). Seeing a team build a prototype shows another level of commitment. I've built hardware, so i know how much more time/effort/money it takes over a software wireframe...It also minimizes one of the risks of the startup. Can the team build what they say they can build? I see 3 primary risks of building a startup; technical, team, and market. My goal is to invest when as many of those are solved, but completely understanding that because i am a seed stage investor, will never see all 3 de-risked before i invest. Some of my investments were during a kickstarter (Prynt and Particle fka Spark.io) Others I invested pre-kickstarter (Shaper -- shapertools.com) And others are not meant for crowdfunding (Plethora, Momentum Machines)

The question of an accelerator vs going direct to VC is a different story. I see accelerators helping a tremendous amount with first time hardware entrepreneurs...and since the hardware startup space is so new, thats almost everyone! However, there are experienced hardware founders, and I have definitely invested in teams that have not gone through accelerators (Plethora -- seasoned entrepreneurs, DFX Machina -- Senior ex-Apple founders)

Overall, its never to early to speak with a VC or accelerator. We are here to support the ecosystem. That means inspiring potential founders to go for it, and help educate those inspired to take the rights steps, and avoid the mistakes of others.

We make it easy to find us for a reason!!!

[chralieboy]

> Seeing a team build a prototype shows another level of commitment. I've built hardware, so i know how much more time/effort/money it takes over a software wireframe...

A wireframe is not the same as a hardware prototype. The similar analogy would be a functioning product, which in software is also difficult to do well. Functioning means it solves a need better than existing solutions, which requires research, experience, insight, and technical knowhow.

Furthermore, building a functioning software product that is well-engineered to scale (as opposed to a hacked out MVP) is, in my personal experience, rare. Very few "engineers" are able to.

[avidanr]

I agree. Perhaps using wireframes was not the best analogy. I studied computer science and spent quite a few years as a developer, both inheriting code bases, and building my own, so i do appreciate code thats built to scale! (though to be honest, mine rarely was...)

[lam]

Some VCs do not recommend companies to go thru the crowdfunding route early on because of the distraction involved. I wonder if you would share your thoughts on what kind of companies should or should not try crowdfunding.