Should I seek investors or not...?

**stryder2048** · 09-24-2007 02:34 PM

I have a new product that is unique and I know it will sell very well. At this point, I have the brand developed and I have a website developed. I can afford to make about 100-200 prototypes, but then I'll have no money for advertising. I was thinking of selling it to local stores first and then generating buzz.

My question is this... this is a product that is easily duplicated, and probably will be duplicated soon by established brands after I bring this to market. That being said, should I get investors involved to increase my inventory so that when orders come in, I can just ship them from a warehouse (or my living room) in a matter of days?

Also, I need money for advertising and would like to hire a PR agency, as they have all the media contacts.

Given this product is truly unique and there is definitely an untapped market for it, how would you guys approach this? Invest my money only or go for investors?

**jasaunders** · 09-24-2007 02:36 PM

Investors are unlikely to invest in a product that has low barriers to entry.

**stryder2048** · 09-24-2007 02:40 PM

Originally Posted by jasaunders

Investors are unlikely to invest in a product that has low barriers to entry.

Which is why it all depends on the timing and the PR... if I can blitz the media and be the first brand to market with this, I could establish myself as the brand leader in a matter of weeks. The name I have, in fact, is extremely memorable and identifiable with the brand... I can see people saying hey can you hand me a ______, even if it's not my brand.

In addition, I am fortunate in that there is no direct competition, and once other companies start copying this, their other product lines will act as a noise barrier. My company will have two products... both in keeping with the style. Nothing else.

**akula** · 09-24-2007 09:41 PM

ok...good question

if you were doing something that matched the typical investment criteria, then it might make sense for you to waste 6-12 months of your life and shop for an equity investor.

however, because you have an opportunity which doesn't perfectly fit the private equity mould (i.e. you're doing a low tech, low contribution margin, consumer product), if you go shopping for an investor now, it can take you years to close a deal - by which stage you'll be tired, disillusioned, the market opportunity would have evaporated, the competitors would have evolved and there will be no business to speak of.

look...i'm just being rational....if you were pitching the kind of "middle of the road" opportunities that make it into the Moneytree report, and you were located in either Silicon Valley, New England, LA/Orange County, or NY Metro - then it might make sense to put your self through all that pain and shop for money. However, in your case, I'd recommend against it. Instead, Take a tip from Peter Ireland and check out his site: antivc

**akula** · 09-24-2007 09:54 PM

Originally Posted by stryder2048

Which is why it all depends on the timing and the PR... if I can blitz the media and be the first brand to market with this, I could establish myself as the brand leader in a matter of weeks. The name I have, in fact, is extremely memorable and identifiable with the brand... I can see people saying hey can you hand me a ______, even if it's not my brand.

In addition, I am fortunate in that there is no direct competition, and once other companies start copying this, their other product lines will act as a noise barrier. My company will have two products... both in keeping with the style. Nothing else.

well...that's all very nice and commendable, but it's irrelevant :-)

what josh saying is correct. what you're saying is irrelevant to both "investor expectations" and "venture outcomes".

from an investment perspective, it doesn't matter if a seed stage investee has a distinctive brand name. that's not something that gets looked at on the list of investment criteria. barriers to entry, however, is an important consideration. likewise, from a strategy perspective, "timing and the PR" is immaterial. it's impossible for strategists to pick the "most favourable" time to launch a product. The launch date is always a complete guess. If the pick works out, people get rewarded for their supposed market timing skills, but if the pick fails (which happens just as often), the market timing failure gets re branded into something else like "it was the manager/the bank/the government etc etc who were the real culprits"

for these reasons, the illusion exists that it's possible to favourably time product launches, but it's just an illusion