The Hardware Startup

Chapter 9. Fundraising

Hardware startups are a capital-intensive undertaking. As you’ll see in Chapter 10, most crowdfunding raises are not a path to funding a company. They provide an infusion of cash that will enable an entrepreneur to work full-time on a product and hopefully take it to market, but a majority of the funds brought in are going to flow back out to pay for production costs.

However, now is a great time to fundraise as a hardware entrepeneur, because there is an increasingly large pool of different types of investors to draw on. This chapter covers how to identify and form relationships with the right investment partners, how to articulate and sell your vision, and how to manage and streamline the fundraising process.

Not everyone wants to turn their project into a big business; it’s important to have a clear idea of what kind of company you’d like to grow into before starting down the path of raising capital. If you’re reading this book primarily to learn how to bring a single product to market through direct distribution, you can probably skip this chapter altogether.

There are steps you can take to achieve profitability without any external cash. For example, if you’ve hung out your own shingle on a platform like Shopify, you can continue accepting orders postcrowdfunding, or perhaps your crowdfunding campaign generated enough press to attract the attention of retailers right away. But most likely, at some point you will have to seek outside investment. To grow ...