Funding a hardware startup is hard. Here’s a cheat sheet to get you through

Photo credit: Varin Rattanaburi

Benjamin is a TIA Star Contributor and publishes high-value content that serves the Asian tech community. Read more from TIA Star Contributors here.

Note: This article was written with hardware startups in mind, but most of it applies to any other startup.

Funding is still elusive for many startups. The main reason is that if you play the game the way everyone does, it’s often a tedious drag.

You can find lists of hardware investors and trends, but in some way, it’s like someone giving you a pair of skis and telling you “Go that way really fast. If something gets in your way, turn.” In other words, it shows you the pieces but doesn’t tell you how to play the game.

Photo credit: Gifer

Fortunately, I’ve outlined a few tips below.

The classic way

It’s the advice you hear everywhere—and then some. I managed to condense it to five words starting with “T.” 🙂

• Traction: This means real milestones like a technical demo, work-like-look-like prototypes, customer feedback, corporate pilots, etc. It shows you get things done! It is not media coverage, YouTube views, and other vanity metrics. Note that misguided customer discovery can also lead to undue confidence in the demand for your product.
• Team: Do you have the experience or pedigree? Have you sold a company? Do you have an ex-Google member? Are you knowledgeable in the industry? Did someone go to Stanford?
• Tech: Is it hard to do, defensible, and affordable?
• Timing: Why now? Did something change in the market or in tech enablers?
• Target: You can’t convince everyone, so just find more of those who believe. As I like to say, “If you want to change people, change people.” In particular, stay away from those who say “Hardware is hard.”

So traction, team, tech, timing, and target.

This is great, but reality is harsh.

The reality

The game is rigged!

Well, not really, but you’ll see what I mean.

Hacks

End game