Attracting funding for your software startup
If you’re a startup looking for both short and long term funding, your biggest challenge is credibility with potential investors. There are two primary areas in which you need to demonstrate your credibility. The first is the commercial potential of your software. The second is your ability to manage the process and associated costs of software development.
Winning over investors
Investors know that timelines and the costs associated with software development can quickly get out of hand. They want you to demonstrate that you have both the understanding and business acumen to make your project a reality. Providing them with a clear knowledge of the process, timeline and costs of development will go a long way to proving you have a viable business model.
Managing investors expectations
The majority of the initial investment capital you receive will need to be dedicated to software development, marketing, sales and support for your new solution. For some, these areas will compete for funding. However, the reality is that not funding all appropriately is a sure fire way of ensuring failure. Your job is to make sure you ask for enough funding from investors to cover both. However, there are ways to reduce the ‘sticker shock’ for potential investors. One way is to manage how you release your software.
If you can release your software in stages, then you can begin to commercialise it earlier. If you do this, you can then ask for funding in stages that correspond with launch milestones. This is often a way in which you can attract larger volumes of funding over an extended period.
‘What is the minimum commercialisation model for my software?’
This is where Redgum’s Redprint™ process can transform the way you view your business model. Redgum has the first-hand experience in successfully developing and commercialising their own software. This knowledge informs the development of their Redprint™ process, and it can help you determine what the minimum requirement is to commercialise your software. Redgum’s Redprint™ will also help to define subsequent iterations of your software to develop further functionality, as funding becomes available.
The Redprint™ process for start-ups starts with an interview and briefing process. This process then delivers a report, which outlines the associated costs and timeline for development, including additional software iterations for additional features.
How to use your Redprint™ reports with potential investors?
Your Redprint™ report will provide you with a report that clearly outlines every fundamental aspect of the development of your software. Your Redprint™ report will include details of easy to understand flow diagrams of your software, color coded to show each iteration of your software, from the minimum commercialisation model, through to a much more comprehensive solution. It will include costing’s and timelines at each stage of the process.
Once you have this document, you can then choose to provide either part or all of the reports to potential investors. You may also choose to use aspects of this report in an Information Memorandum or any investor information.
Your Redprint™ report will demonstrate to investors that you have done your homework and clearly understand the resource requirements to bring your software to market.