MVP Development: The Investor’s Point of View

An investor rarely needs to have a big name, unlike the products in which he invests. But even the most famous products were once startups: their developers presented an idea, a business plan, and an MVP, all things no entrepreneur can do without. So what exactly does a Minimum Viable Product need to look like nowadays in order to find investment in startups, get noticed, and get chosen? I’ll try to answer that question as succinctly as possible.

1. Forecasts for the Industry and the Market

A developed product begins with value and risk assessment. After all, if your business is developing in the wrong direction, and the market is crashing, it’s a bad idea to create, and it’s an even worse idea to invest. In such situations, even your very first potential investors, the so-called FFF (Friends, Family, and Fools), the people who love you no matter what, might look at you sideways. So maybe you should ask yourself: did you spend enough time evaluating your startup MVP?

2. Product Functionality and Benefits

Your product must solve a problem and meet the needs of the client: those two goals are what all startups aim to do. The MVP should indicate to your potential investors your methods of measuring consumer orientation. And it’s often necessary for the MVP to prove the existence of a specific problem or a target audience’s pressing need.

3. Viability and Scalability

A competitive advantage is what will keep your startup project alive, and this needs to be clearly demonstrated in the MVP. In the “minimum,” it’s a good idea to emphasize the project’s scalability: if your product can solve issues for a large number of people, but is capable of doing it for an even larger number of people, investors will definitely show interest.

It’s important to show your interest as well. Your faith in your startup and your own investment in it are things that potential investors will look for. And if your prototype already has reviews, that’s an additional advantage.

4. Risk Management

There are always risks, both internal and external. But your country’s economic situation is one thing, while incorrectly defining the target audience is something else entirely. If you’ve owned a business before, tell the investors, and explain your previous business’s strengths, as well as the mistakes you made and the things you learned. The fact that you have experience will inspire more confidence than a detailed plan of 110 slides ever could.

5. Team

The startup team is important: its enthusiasm, cohesion, and professional attitude. To create the image you want, the team should introduce those who already believe in the startup to those who are interested in the startup. But the main thing is the approach to the work: the founders’ attitude and the product implementers’ attitude. They are the ones who can prove to an investor that the MVP development has “traction” i.e. relevance for the customer which will motivate the customer to use and buy the product.

And last but not least: no matter how good your MVP for a startup is, prepare for whatever questions investors may ask during the product presentation. If you show them that you know what you represent, they’ll form the correct opinion. It’s true that MVP can always be redone and improved, but you only get one chance at a first impression.

Be inspired and be confident!