I've been working for 9 years after my graduation as a software engineer in a big german company. Hence, I've always been a simple employee and never dealt with entrepreneurship/Start-ups. Now sometime ago I came up with an idea for a software product which doesn't exist on the market yet and which in my opinion could reach a huge market. I'ver created a design but to be able to release a first version for the market I figured I need at least 10 IT-professionals working full-time for at least 12 months (and that is just the IT-part). So my question (as someone having no idea of entrepreneurship) is: Will there be any venture capitalist/bank willing to give me money just for a design/idea. If not, what would you recommend to turn this idea into a product?

EDIT: It's not a duplicate of How do I Raise Money for my small Business? since:

  1. I don't have a business yet
  2. I actually have a concrete idea for a product
  3. The answer in this question doesn't solve my problem
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    Is your company willing to sponsor you and patent it under your name/leadership? – Dan Mar 2 '18 at 19:49
  • the idea for the software product is not related at all to the products developed at my company. It's more a product of my leisure activities. – airborne Mar 2 '18 at 20:01
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    Accept the first answer in 30 minutes is not exactly the metered consideration I would expect of a successful entrepreneur. – paparazzo Mar 2 '18 at 20:10
  • ok, didn't know i can only accept one. I'll wait a little bit more;) btw, I'm far away from considering myself a successful entrepreneur ;) – airborne Mar 2 '18 at 20:13
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    I'm voting to close this question as off-topic because t's about business strategy, not the workplace. – DJClayworth Mar 2 '18 at 21:17

This will get closed, and it should probably be migrated to the entrepreneurship version of this site.

Anyway, to put you in the right direction -

  1. No, no VC will fund you unless you're a senior manager in your company with excellent connections
  2. An angel investor will fund you though, typically to a value of up to 500K, although it's now possible to raise more in Angel
  3. You'd want to go to Berlin, which is the main hub for entrepreneurship in Europe
  4. Your product is way too complicated right now. 10 IT professionals working full time is ~ 600K Euros, and then you'd need that again on marketing, and then another 50% on ancillary costs. All up around 2mm Euros for one year. You don't have a track record of success, so you're not going to get this money.
  5. Whatever you're doing, make it much much simpler. You can raise for about 2 devs working full time, and that amount again on marketing. Now you only need 250K raised/year, so with 500K can last for 2 years, which is more reasonable.
  6. Find angel investors on angel list, or on startup meetings. Wherever you are in Germany there are probably universities nearby, those universities will have entrepreneurship courses, as well as accelerators.
  7. Pitch your idea in competitions in Germany, this will get you
    • more experience pitching your idea
    • if you win, more exposure and a chance to get VC/Angel funding
  • thx a lot for your helpful suggestions. I'll look into it. I just fear that making the product less complicated won't work since it's pretty technical and you can't develop 20 % of it – airborne Mar 2 '18 at 20:00
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    @airborne - You absolutely can develop 20% of a product. Mock screenshots. If you cannot break your idea into individual segments then you have a design problem. – Donald Mar 2 '18 at 20:05
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    @airborne you need to consider who is purchasing this product, and how you will reach them, and what you're pricing it as. Now that you've taken a stab at that, interview some of them, and work out if they think it's useful. You can always simplify a product, you just need to show that people are willing to buy your thing, and then raising more money becomes easier. You will struggle as an unknown to raise the kind of money you're indicating. – bharal Mar 2 '18 at 20:06

The further you can get along the better position you are in to get funding.

If you think you have something then get a non-disclosure agreement (NDA) and have anyone you discuss the product with sign it.

Can you scale back to a minimum viable product (MVP) that you can put out sooner and for less money?

You should have 3 documents:

  • Business Plan
    must include cost and revenue forecast
  • Product Plan
  • Marketing Plan can be part of the business plan
  • Preliminary Design

If you could build a proof concept before you go for money then do it.

As far as getting angel money there are web sites out there. Venture capital is for when you are further along.

Have your numbers down. If you want $1,000,000 for 10% of the company you have to prove the company is worth $10,000,0000. Without a prior track record you are going to have trouble raising that unless you have really great novel idea and proof of concept you can show them.

My advice is do not take on personal debt. OK to not pay yourself but you need an exit strategy if the product is not commercially successful.

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    You also have to identify who your competition is, that, of course, would be part of your business plan, everyone has competition. I have trouble accepting there isn't a market currently, you should identify the closest competition to your software product, I am going to guess you will find several. I personally wouldn't use the statement, "software product which doesn't exist on the market" in any document you create. You are almost saying there isn't a market for your idea. Which is the reason I suggest you identify your closest competition. – Donald Mar 2 '18 at 20:33
  • @Ramhound Yes, that would be part of the business plan. I will take OP at his or her word it is a new idea. – paparazzo Mar 2 '18 at 20:52
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    Down vote come on. What is the problem? – paparazzo Mar 2 '18 at 21:29
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    I didn't, out of courtesy, but it's probably the statement "get everyone to sign the nda" thing. Nobody will sign an nda, certainly no investor will. You're asking them for money, you're not exactly doing them a favour, and an nda messes up their deal flow – bharal Mar 3 '18 at 12:55
  • @bharal So you would pitch your unique idea with not protection they will not disclose it or just use it themself? – paparazzo Mar 3 '18 at 12:58

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