🚀 Lesson Plan: Validating Your Startup for Investment Readiness

Module 4: Concept Validation & Early-Stage Fundraising

Tagline: Building Confidence in Your Startup by Validating Key Assumptions Before Raising Capital

🚀 Module Overview

In this module, we explore the crucial steps early-stage founders should take to validate their startup ideas before seeking investment. You’ll learn about key assumptions that investors expect you to validate, how to assess fundability, and when to pursue funding (or alternative financing options). Our guests provide insights into investor expectations, founder preparedness, and how to position your startup for success.

💡 Key Learning Outcomes:

✅ Learn how to validate a startup idea before raising money, focusing on customer demand, market fit, and feasibility.
✅ Understand what early signals investors look for, even when a company is pre-revenue or pre-product.
✅ Develop strategies to test critical business assumptions using simple, low-cost experiments.
✅ Gain clarity on when and how to start fundraising, based on validation progress and investor expectations.

🎙️ Special Guests

👤 Emily Hu – Limited Partner at Sugati Ventures and Senior Director of Clinical Trials at Nutrafol, with expertise in medical technology investment.
👤 Keegan Evans – Founder of Euda.io and startup mentor, specializing in early-stage startup development and investment readiness.

"If you don’t need investment, don’t take it. The best businesses grow profitably without giving away equity." - Emily Hu

📌 Key Discussion Topics

1️⃣ Understanding Angel Investors & Venture Capital

✔ Angel Investors vs. Limited Partners – The differences in investment types and expectations.
✔ Types of Early-Stage Fundraising – Friends & family, angel investors, venture capital, and non-dilutive funding.
✔ Investor Decision-Making – Risk assessment and key factors investors consider before investing.

2️⃣ Validating Your Startup Before Fundraising

✔ Identifying Key Assumptions – What must be true for your startup to succeed?
✔ Early Market Validation – Customer surveys, pre-orders, and waitlists as proof of demand.
✔ Assessing Team Strength – Why investors look for experienced founders or teams with complementary skills.
✔ Avoiding Overvaluation – The dangers of unrealistic valuations without traction or defensibility.

3️⃣ Alternative Fundraising & Financing Strategies

✔ Grants & Non-Dilutive Funding – Why free money is better than giving up equity too soon.
✔ Bootstrapping & Small Business Loans – When to self-fund and maintain control.
✔ The Right Time to Raise – Knowing when investor funding is necessary versus when it’s premature.

🏆 Lesson 1: What Do Early-Stage Investors Look For?

🔍 Breaking Down Investor Expectations

Investors at the early stages don’t expect you to have all the answers, but they do expect you to have:

✅ A Unique Idea with IP Potential – Is your idea defensible? What prevents competitors from copying it?
✅ A Strong Founding Team – Experience, industry knowledge, and a balanced skill set.
✅ Clear Market Validation – Customer traction, waitlists, surveys, or early adoption metrics.
✅ Realistic Valuation & Funding Request – Asking for what you truly need, not an inflated amount.

📌 Action Step: Evaluate your startup using the criteria above. Identify weak points and create a plan to strengthen them before seeking funding.

🏆 Lesson 2: Is Your Startup Fundable?

🔍 How to Assess Your Fundability

Not every business needs investor funding. Some startups are better suited for bootstrapping, grants, or early revenue.

✅ Is Your Business Scalable? – If growth requires major upfront investment, funding may be necessary.
✅ Do You Have Early Customers? – A strong customer base (or LOIs) makes fundraising easier.
✅ Are You Solving a Unique Problem? – If your startup isn’t different or defensible, investors may pass.

📌 Action Step: Use a fundability checklist to determine if you truly need investment, or if alternative funding methods are better for your startup.

🏆 Lesson 3: Finding & Approaching Investors

🔍 Where & How to Connect with Investors

✅ Attend Startup & Investor Networking Events – Local events, pitch competitions, and incubator programs.
✅ Leverage Warm Introductions – Cold outreach rarely works. Build relationships through mutual connections.
✅ Be Prepared – Have a polished pitch, clear financials, and realistic expectations.
✅ Know Your Numbers – Investors expect you to understand how you’ll use their money and the expected return on investment.

"Cold LinkedIn messages rarely get responses. Build relationships and get warm introductions whenever possible." - Keegan Evans

📌 Action Step: Identify three startup events or networking opportunities to attend in the next month. Start building investor relationships before you need funding.

🛠️ Actionable Takeaways & Frameworks

✅ Investor Readiness Checklist

📌 Do you have a well-defined problem and unique solution?
📌 Have you validated demand through pre-orders, surveys, or waitlists?
📌 Does your founding team have the necessary skills (or access to experts)?
📌 Do you understand your financials and funding needs?

✅ Finding & Approaching Investors

📌 Leverage startup incubators, pitch competitions, and university resources.
📌 Focus on building relationships before fundraising.
📌 Be concise, confident, and data-driven in investor conversations.

✅ Avoiding Fundraising Pitfalls

📌 Don’t overinflate your valuation – early-stage investors see through hype.
📌 Ensure your fundraising goals align with actual business needs.
📌 Prioritize traction and validation before approaching investors.

🎯 Founder Challenges: Apply What You’ve Learned!

📌 1. Validate Assumptions: Conduct 10+ customer interviews or surveys to test your market demand.
📌 2. Build Investor-Readiness: Create a one-page summary outlining your startup, traction, and funding needs.
📌 3. Network & Connect: Identify one investor or mentor in your space and schedule a conversation.

🚀 Next Steps & RESOURCE MAP

📌 Join us for Module 5, where we explore startup financial planning and managing cash flow for long-term success!

Keegan Evans

Emily Hu

RESOURCE MAP