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What is more important for a startup: Finding a VC or finding the customer?

Created by : Veena Gupta, Analyst, Blackstone Group  | 01 27 2011 05:18:13 +0000
Industry : Hedge Funds/VCs/Private EquityFunctional Area : Getting Started(Entrepreneurship)
Keywords : entrepreneur customer startup vc venture capitalist vc funding angel funding
Activity:  354 views;  last activity : 02 06 2011 19:20:11 +0000
 
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I think today successful entrepreneurs do things differently from what they are taught in business schools infact...and its not like entrepreneurs come from top B schools only it can be anybody and today successful start-ups do not wait for venture capital (VC) funding, but are more focusing on finding a customer first. When there is no customer for their product then no point in getting a VC funding, but there are people who first go for VC funding to do more research on their venture and potential customers and then go for a launch...but the best way to start a business first is to find customers first and then go for a VC funding.
By Veena Gupta, Analyst, Blackstone Group  01 27 2011 05:18:13 +0000
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If you dont get your business going what use of even finding a customer ? You need to have the funding in place first to get your business started, to put the infrastructure in place, to assemble a good team and so on, only then can you address the customer that you get.
By Jaygopal Raghavan, Marketing Manager, Landmark Group  | 02 06 2011 13:50:27 +0000
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For a start up VC is required more as compared to customer. Customer comes once you do a lot of effort. You should have good resource, tie ups and infrastructure. At start the customer will not pay you as they the existing service provider. So you have to grab business and add customers even at loss. To support the stat up the financial back up is must in the initial 3-4 years. For getting a good project / customer there is huge sales & marketing cost for an start up. Also for delivery the cost is higher with start up. Being a start up the customer will pay you after the successful delivery. So for a start up the VC is more important than customer. If you have financial back up then you have the time to plan a business and implement it.
By Kaifee Anwer, ERP Consultant, Business Application & Consultancy Services  | 01 28 2011 09:25:03 +0000
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An entrepreneur who has found the right customers doesn't need a VC.:-)
By Omkar Nandi, Business Analyst Merchandise planning TARGET  | 01 27 2011 09:37:18 +0000
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We decide on start up of a business only after anlysis market demands and present supply.So it means customers are there.The main and importnat thing is to get a VC and impress upon them with our details
By sheriff r mohideen, General Manager -Technical, Origin Foods Limited  | 01 27 2011 07:53:07 +0000
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Customer base is very important for the product to sell in a start up.It takes time to build up this base over if its a standalone business entrepreneurship. if it is supported by the already existing business then venture capital would play a major role.
By Rajendran Mariagnanam Mariagnanam, Founder and managing partner, Braintrain consultancy services LLP  | 01 27 2011 06:35:53 +0000
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offcourse customer
By Jasmin Pawar, HR Manager, HR GLOBE CONSULTING  | 02 06 2011 19:20:10 +0000
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Veena all along that was and is the rule. In case there is no customer and some body produces with the funding from VC imagine the plight of the people associated with it. 

Yes the winners do the same thing different way.The first thing is project report which is indicative of number of customers the size of the market and various other details.

So funding will always be the second. It actually sounds absurd if some body will approach for funding without any details of customer base current production the future etc.
By Rathin Deb, Freelance Retail Consultant  | 02 06 2011 14:13:52 +0000
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Any big idea would be successful only when the idea has a perfect target segment and potential customer base, without which roping in VC investment would not only kill the idea, but also push you to the wall permanently.
By S. Muralidharan, Executive Director, Knowledge Foundation & Campus Around the Corner  | 01 27 2011 12:27:55 +0000
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Customer is one who make a business, give a business and hence profit. Always one should give the first priority to its Customers.
By Anand Sharma, Monitoring the research funded by DIT, Department of Information Technology  | 01 27 2011 09:07:40 +0000
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Agree, Sales is the lifeblood of any business - without a successful business model no one would be interested anyway.
By James Moss, Principal, US Global Marketing Group, LLC  | 01 27 2011 08:03:28 +0000
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If your project can reflect a solid customers & can, really ,fetch you the intended goal easily. Its , then easier for you to get VC. More VCs will come forward to invest in your project as it is forecasting a strong customer base to reward for his investment.
By KALIYAMOORTHY , Oil & Gas Area Coordinator, Undisclosed  | 01 27 2011 07:46:35 +0000
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A business models output is always Sales. Input = Capital + Effort. Unless you find sales , it pointless of having Capital and Effort. VC is good for expanding a business but a VC will invest only if your effort will have its restult ie., Sales. Finding a VC before mapping your sales channel is absurd. You should clearly understand your sales channel to pitch for VC's. In short its always Customer First.
By Joe Antony, Retail Sales and Marketing, JSW Steel Limited  | 01 27 2011 06:06:57 +0000
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'The purpose of business is creation of customer'. VC's come in at a later stage for majority of start ups. But in exceptional cases, if the idea is brilliant and if the entrepreneurs have good connects then VC's look at the idea , business model and straight fund the start up, this happens mostly on the technology front.
By Omprakash C R, Head MBA @ PurpleLeap a Pearson Educomp Company  | 01 27 2011 05:51:51 +0000
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