Hey Brian,
While I don't have any meaningful experience in this strategy, at my new startup Chloe, we've found a few B2B2C customers who we called for product feedback/discovery that expressed interest in paying for it once it's live. So while they haven't pre-paid, they have committed via an LOI to use the product and have been helping us craft the perfect product for them which has been super helpful.
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Eyal Cohen
Co-Founder & CEO at Chloe
Forbes 30 Under 30 | 2021
JoinChloe.com
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Original Message:
Sent: 12-22-2022 07:09
From: BRIAN FREEMAN
Subject: Getting Customers to Pre-Pay for Products Before They Launch
Hey Everyone,
I'm a 3x founder with a strong track record in my space. I'm in the process of building/launching a new b2c2b solution creatorland.com, that is like a modern linkedin for content professionals. Fundraising at the seed stage I am anticipating being highly punitive and dilutive in 2023 for SaaS companies. I've been seeing reports of M&A and late stage deals for very high revenue SaaS companies getting 4-5x revenue as a best case on valuations, just a bloodbath out there.
One strategy I've been considering is going to my contacts in the space and former clients, and road-showing our dev pipeline, and demo'ing what we're building and targeting 3-4 customers for an early pilot initiative that requires alignment of interests through buying 1-2 years worth of licenses and/or a strategic investment in the business - this would be in order to delay having to raise a smaller pre-seed venture round, which worst case is a pain in the ass or impossible to raise, and best case has a valuation on it I'm not that interested in taking. We've brought in a little over $300k in friends and family in the 4th quarter, and I have a few tricks up my sleeve that have reduced our GTM market costs from years in the industry.
Very curious if any of you have had success with this tactic!
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BRIAN FREEMAN
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