[optimus]

The problem I'm worried about is precisely what you're warning against: I'm confident that I can successfully launch in one city (with my own funds) but I'm afraid that this will be considered post-launch and pre-traction when I solicit investors.

[rguzman]

if you can recoup your funds 10 days after launching in one such city, why are you worried about the investors?

launch in 1 city -> recoup -> launch in another city -> recoup -> ... do that enough times and you either have traction and/or you don't really need investors.

i suspect that your prediction of the recoup-ability is what's off.

[optimus]

I should be more clear.

The startup's customers are from among many verticals. Acquiring those customers is why I need the sales team. I can work to acquire a few myself within a specific vertical. To service the acquired customers is where the monetary expense is required (think PPC ads that are later billed to the customers, for example).

Of course, I can do one at a time, but why? That's the point of me wanting to seek funding - to scale quickly...to go after multiple companies in multiple cities within multiple industries.

[tptacek]

The dynamic you are describing captures probably the majority of all the pitches investors hear. Everyone thinks they can "recoup" within X days of spending on sales, marketing, and support. The reason to do it one city at a time is that it allows you to demonstrate two things: (a) that your model actually does work, unlike the 1000 competing pitches that claim the same thing but don't work at all, and (b) that you don't actually need their investment, which gives you leverage in your negotiation and, counterintuitively, makes you a more attractive investment.

[optimus]

I see.

(b) is golden. In a way, it's like ignoring a girl that I like, while making myself discernibly more desirable.

Thanks.