What is the best getting investment strategy?

Question

Consider a person wants to create a giant company as big as Airbnb, Netflix, Coinbase, etc. And he has an idea that investors will love it.

This person also knows the computer programming and can create a mobile/web application of his idea that can work for 1000-10,000 customers( I mean it's more like a prototype-mid quality app. It's not a high performance and industrial quality app that can handle millions of users, but it works and can show all/most of the ideal app's features for a lower number of customers).

1. Is it better for this person to write the complete application by himself, then bring it to the investors and request for funding before publishing the application or it would be better to publish the app and start the business and find some customers, then go for investment? If the second option is more preferable, reaching how many user is a good point to go for the investment?
2. What if he only create a mockup using Adobe XD or Figma and don't waste his time writing the complete application, if we know writing the complete app may take 6 months but creating a mockup takes 1 month for example? Will any investor invests on a mockup? (By mockup I mean you have a fake application that shows all the features of the real app but it's not an application and can't have any users and it's just a visual demo).

I really need help about this and don't know which of these 2 cases or maybe another case I didn't mention works for such a guy that I am also like it? Please help me if you know what is the true way of becoming a successful entrepreneur?

Answer 1

Realistically, this is not answerable other than saying "it depends".

What is it that you are hoping to get from investors? If you just want to get money from them in exchange for a share of the business, and assuming you have a goal of retaining as much of the business as possible, then you'd want the company to be as valuable as possible when you seek investment. A company with customers and revenue and patents is vastly more valuable than a company that has no revenue, no customers, no patents, and just a mock-up of an app. You'd want to seek investors when their money let you scale out your business more than your shares are diluted. But that's not the only situation-- sometimes people seek out investors that bring particular skills to the venture and are willing to give up more of the company to make that happen.

What is the company doing? Scaling a software-only company tends to be relatively easy and inexpensive. Scaling a company that needs to build hardware or work with regulators tends to be a lot harder. That will influence when it makes sense to reach out to investors.

Answer 2

Is there anything actually patentable or otherwise 'exclusive' about your idea, except that you don't see it in the market?

Potential investors could sign NDA's, of course, but how are you even going to get someone willing to listen to your presentation if they have no clue what it is?

The point I'm trying to make is that if you don't even have a workable app with even a tiny userbase, then it will be very difficult for anyone to take you seriously. And canvassing for investors to meet with you will require that you divulge, little by little, what your idea is. Hopefully then, you have something that gives you a competitive advantage against others who may try the same thing.

Perhaps setting your sights lower than 'as large as Air bnb' would be a way to more realistically let you work towards something presentable.