Four Things You Need to Raise Funds for Your Marketplace
A great idea
Every successful business starts with a great idea. Congrats! You got that. Now what?
Well, if you are not a company with a significant budget then it is time to enroll friends & family and start putting together your seed money. As great as your idea is, investors will want to see more. VCs want to see that you can enroll others to invest in your idea and that you have skin in the game. If you won’t invest and you can’t raise initial funds for your idea, why would a VC invest? Would you?
The programming of the marketplace will be the most expensive part of the process, all the more reason to get it right from the start. Moving a skyscraper 3ft on paper is easy, moving it once it is built is not so easy.
Wireframes are like the blueprints of your dream house showing exactly what will be built. They map out all use cases, every button is accounted for. A typical marketplace wireframe is between 100–150 pages.
By the way, if you’re hiring a team to build your marketplace and they don’t take you through an extensive wireframing process — run, don’t walk away. Get it wrong in the wireframe process and you will be paying for it exponentially later. It might not be the most exciting process because you have to think in a very granular way about every possibility but it’s an effort well worth making. A good wireframe helps you organize your thoughts, figure out workflow, payment methods, dispute, shipping, etc. Now that the process is predictable and organized, a good development team should be able to give you a fixed price and turnaround for the build.
After this process (which should include challenging every assumption) you will be fluent in your marketplace and able to answer any question a VC might throw at you about the “how” of your marketplace. They want to see that you have thought “of it all” already.
Now you know your idea can actually work. Good idea, substance.
How important is a brand identity (logo)? Companies don’t spend billions on building and protecting a brand because they don’t matter. While it might be difficult to put the value of your brand in a spreadsheet, it is either helping you or it’s a barrier and there are enough barriers you can’t avoid, this is one you can.
We all know that if a brand over promises the customer is unhappy. When a brand “over delivers” based on the low expectation set by a poor brand, yes, the customer might be “pleasantly surprised” but they will not value your service as much as if you had a good brand.
If you bought a $1,000 coat at a fancy retail store and lost it and then found the same exact coat being sold off the back of a truck, would you pay $1,000 for it? Same coat. Of course not — same product, different brand, different perceived value. If you want big bucks from VCs, make sure you have maxed your perceived value first.
And again, you get what you pay for. If a design studio isn’t asking you questions as part of their branding process, well you know what to do. Run.
Find the right team to help you translate your message visually. First impressions count so you want to make sure your logo is communicating the right message.
Great idea, substance, message.
Now you have to get people excited. You can’t be everywhere all the time. A “sizzle presentation” should explain what your value proposition is in an inspiring way. How are you going to make my life better, easier, save humanity?
It can be a click-through emulating the experience a user will have or a short video inspiring users to join — or both. Whereas the wireframes are the substance, this is the sexy part. Now the VC can see the 3D model of your house rather than just the blueprints. Now we are getting them excited.
Great idea, substance, message, inspiration.
What about a Business Plan?
Of course the more you have done, the better but often business plans are full of conjectures with little based in reality and VCs know it. Most of the facts they will be interested can be covered in an executive summary — especially in the seed stage. Later, yes, you will need a full business plan but at the start where every hour, every dollar counts, your resources are better spent on the 4 basics.
It’s not a free ride and you’ll come up against many obstacles but as you overcome each you get closer and closer to seeing your idea become a reality and then it happens and that is an amazing day indeed. Go for it!