[zminjie]

How do you reconcile this advice and position yourself if the seed round is only enough to prove out whether the product can be built at all?

As an analogy, say I had the idea for a car when everyone is still using horses. I raised a seed round to build my car but the funding is only enough to build a car prototype that goes 10mph. At 10mph, there is obviously no product/market fit since horses are still faster and cheaper. However, the prototype proved out the technical challenges, so I know with more capital I'd be able to make a car that can go 80mph, making the horses obsolete. How would your post apply in this case?

[mwseibel]

I think there are certain companies with significant upfront capital requirements that first time founders will find it almost impossible to get funded. This is unfortunate and probably reducing overall innovation but I think the revolution that has caused first time founders to get funding has been software. Software has significantly reduced the upfront capital required to get a business off the ground. I think we Founder venture further and further away from pure software companies they are going to find fundraising much more challenging.

[numbsafari]

A company that comes to my mind is Kestrel Aviation. They had a great plan up front, founder pedigree, and experience. But they got distracted by hubris and stopped executing.

Launching a new general aviation company is massively capital intensive. They raised a bunch but failed to do anything that resembled shipping. They could have made individual parts, they could have sold kits. Any number of things.

Sometimes you have to start with the small pieces, or do services engagements. These things generate revenue, attract staff, and enable you to build the kind of organization necessary to do something capital intensive.

Trying to go to Mars as step one won’t typically work. Try to find business models for the components and assemble over time. My guess is that Elon Musk’s portfolio follows this model.

[hkmurakami]

High technical risk projects like this typically come with highly vetted market needs.

On the other hand low technical risk projects tend to come with higher market need risk.

[pg_bot]

I think in that case your ability to raise additional funds will be dependent on the persuasiveness of your argument. The investors would need to believe that you have a viable plan, and that you are the person who can execute it. If they don't believe you are worthy of investment others may take inspiration from your work in their attempts to make the product a reality.

[s73v3r_]

If that's the case, shouldn't you then align yourself with someone who does have a proven track record in doing these things?