I wrote the following for first time SaaS startup engineer founder

If you are building a product or a business, I recommend looking into steps needed to get outside capital. I firmly believe you will benefit from that by focusing your business efforts, and if nothing else then by being aware where the money for growth (or runway) can come from.

I wont argue here for raising capital, speeding up your growth etc, but will instead outline some of the benefits & steps of the fundraising process that I think are universal useful to your business goals.

I write this as a Founder & Engineer with Economy, business & software education, after seeing others planning or attempting their businesses without relevant background. In the past I secured government grants but have not taken on any VC funding so far.

Baring hype cycles and cheap capital, raising money means you have to have an excellent team, a good product you believe in, and a good business plan. You generally can’t just bring a bag of onions¹ to someone and ask them to give you money for your onion idea.

What I would personally recommend is to pick a VC, ycombinator.com is excellent choice, but there are many many others as well of course, and prepare as if you will apply. This will help you with so many steps of business building process. I see my friends thinking about APIs, unit tests, extra features, cool names and domains, but no one ever mentions things like Product Market Fit (PMF), Ideal Customer Profile, or even a Business plan. They don’t have an elevator pitch, because they’re not even sure what they are building. They like to daydream about the day where they work on tech problems they like, and get paid for it. They don’t actually want to release, deal with marketing, sales and customers. I have seen this many times. They’ll even happily consume YC library², but when the time comes to send out those first cold emails - nothing. As if there is a chasm between their IDE and going on the market. Something as trivial as opening simple LLC seems like monumental thing to big part of the population.

Anyhow,

referencing the excellent book by Alejandro Cremades, “The Art of Startup Fundraising”, “he savviest founders give themselves plenty of time and cushion to raise the capital they are aiming for, …, this doesn’t mean putting everything else on pause, or slowing down your startup. In fact, continuing to clock progress in development, branding, your client base, and sales can help in the fundraising process.”

While I disagree on his timeline of 18-24 month plan for seed rounds (IMHO you shouldn’t wait for those for more than 6 months), I do agree with most of his milestones during your startup and fundraising process:

1. Idea conceptualization - what are you doing
2. Market research - who you are doing this for
3. Business plan creation - how will you do it
4. Testing the waters - get least letters of intent
5. Finding your cofounders - this will make or break your company
6. Making key hires - postpone as much as possible³
7. Building a board - you don’t need to think about this just yet
8. Prototypes and beta testing
9. Launch of a minimum viable product - do it ASAP, 20-30days max
10. Expanding early adopters and users
11. Gaining revenues - start with dead simple simple pricing, you ll charge more when you provide more value
12. Proof of demand and potential for scale
13. Breakeven point

1 Action: letters of intent

Before you waste time on anything else, do the bare minimum to be able to get letters of intent⁴. This can be an complete 180°. Asking someone to put in writing that they’ll do business with you based on something requires you to have very good arguments and/or beginnings of a very potential product. To me this is the ultimate Mom test⁵.

To be continued.