When launching a business, investors become crucial to the future of your product. Nearly 40% of angel investors put their money in start-up businesses, but you'll tip the scales in your favor by developing a prototype to enrich your proposal.
1. Interaction
A prototype is a physical object that investors can see and touch, which will give you a tremendous advantage during your sales pitch. The prototype creates a tactile experience that extends beyond figures and market data listed on a piece of paper.
Technological advances in 3D printing and rapid prototyping have made it easier for start-ups to launch new products, but they also create significant competition. To keep up with other developers in your industry, you must give investors a way to interact with your product from the very beginning.
Although prototypes are valuable across all industries, they are absolutely essential for products that naturally involve physical interaction, such as:
- Toys and games for children
- Medical devices
- Tools and hardware
Without a physical prototype, you can't give demonstrations during your investor pitch. This seriously weakens your chances for success because investors operate based on the potential risk of putting money into your venture.
2. Emotional Connection
Beyond simple interaction, prototypes also create an emotional connection between investors and your product. The most successful proposals involve products that provide an elegant, cost-effective solution to a "major pain" in your industry such as:
- Decreasing the amount of time it takes to complete a task
- Easing physical or psychological discomfort
- Lowering the cost of a product, service, or process
In the medical field, for example, rapid prototyping has become an indispensable tool in crafting prostheses and implants. When investors see the prototypes, they can more easily imagine how those products will change and improve lives on an emotional level.
Hitting emotional notes in your pitch or proposal isn't enough; investors need to see how the product will operate and how it will impact the market. This is why it is important to refine your prototype before you pitch to investors.
3. Commitment
When you take the time to create a prototype of your product, you demonstrate your commitment to the venture. A prototype communicates to investors that:
- You are personally invested in the product's success.
- You are capable of working a design through the prototyping process.
- You are confident enough in the product to invest your own time and money in its foundation.
You might increase your odds even further by presenting your prototype to potential customers before you pitch to investors. With that feedback already under your belt, investors will feel more comfortable taking a risk with your product.
4. Cost Analysis
The prototyping process provides you with a more in-depth understanding of how much time and money your product will require for production. While this is valuable information for you and your vendors, it is even more important for investors.
An investor wants to put his or her money in revolutionary designs and products, but he or she is also concerned with the bottom line. Investors are looking for the most cost-effective products to produce so they see faster returns.
Building Your Product
Prototypes aren't just beneficial for investors. Even if you don't receive funding after your pitch, you'll walk away with valuable feedback based on a physical rendering on your product. At that point, you can make improvements, then pitch to investors again.
When your product is ready for this step, consult with an expert in rapid prototyping or 3D rendering, like those at EIGER lab. Learn as much as you can about this process so you're prepared for the day when you are finally ready to present your product to investors.
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