Ask HN: Ask for money before having a prototype?

Ideas are cheap. Everyone has them, and most have more than one. The ability to make something work is a whole different matter.

As an investor, you're determining risk vs reward. How much risk is there that I'll give my money to this guy and not ever get anything back?

If you have a prototype to play with, you at least know that the entrepreneur is capable of building his idea.

If you have actual users using the prototype, you know the entrepreneur is capable of building something others want.

And if you have any paying users, even if they aren't paying much, you you know the entrepreneur has been able to build something that people want bad enough to pay for.

Each of these steps is a reduction is risk.

The more risk an investor has, the less likely they are to invest. And if they DO invest, the more expensive their money is going to be. Anyone willing to invest in just an idea is going to want a lot more of your company for their investment, because they're absorbing a lot more risk than the entrepreneur.

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unless you are friends with the investor, and he just helps you out because he feels obligated since you are his friend.

The 5-6 months you'd spend chasing funding are much better spent coding a prototype/final product

It would likely depend on the scope and scale of the idea, and how you go about proving that you can be successful at implementation.

If your idea is geared around a web-app, your chances are probably pretty small. It's easy to put together the basics of a demo, and anyone who did not put in that minimal effort would likely be met with skepticism.

If your idea is something like a complex new mesh networking algorithm and chipset... well, most investors wouldn't expect you to have developed a new ASIC out of your own pocket ;) However, you would likely need a very solid track record in the technology and other applications of it (eg: work at another company, research lab, etc.).

You can spend the next 6 months of your life knocking on investors' doors with just your idea, and have nothing to show for it.

Or you can spend the next 6 months to hack an ugly prototype. You'll be amazed how much further along you are.

That's because in the second scenario, you actually did something. That has value. It may not be your final product, but you'll learn so much more than tweaking the template on your powerpoint deck.

Wow, please don't take this badly, but: if you don't have a few prototypes, how can you really know what works and what doesn't for your general ideas?

Definitely, build a few experimental systems and get feedback from them. With frameworks like Rails and Django, the cost of prototyping is small.

Suppose that you were being approached to invest your money, how would you react to a "great idea" vs a "it's not done, and it's ugly, but let me show you what it does"?