Man with a Diffusion Model (subobject.co)

I’ve contacted all VCs in the world, all of them. Twice. Managed to get about 10 interviews, but the response is cold. “Too early”, “no conviction”, “not scalable”, “crickets”. I’ve heard it all, and always try to alleviate the concerns by addressing it and improving the product. But still, nothing. It’s also the third year I’ve applied to YC, never reached the interview stage. Also applied to 5-10 other accelerators too.

We are a team of three with deep expertise in the field.

About the product: it’s launched, it’s validated, it’s generating profit. Collaborating with stealth hardware startup to hardware accelerate our product (truly state-of-the-art stuff with redacted and TSMC). Working with industry standards bodies to improve the state of the industry.

Perhaps our product isn’t cool, it isn’t sexy… but it absolutely solves a real problem and we have proof of that. So, how to attract VCs? Is it about the buzzwords and the AI-hype? Do we have to pivot to be AI-first instead of AI-where-needed? I’m lost. Thankful for tips.

Comments (4)

bytesandbots · 2h ago

I'm just listing some points that a VC might be interested in, but you haven't clarified, at least in this post. Usually, they need information of the following also:

- Is the market big enough to allow multiple players at a large scale? There are many viable and profitable ideas, but having a ceiling due to limited market demand is a negative.

- Apart from your technical expertise, do you have go-to-market capability to be able to capture the above market?

- Do the promoters have a vision for exit? Running a profitable long-term business is not usually the right venture for a VC. They need to see a possibility of either acquisition or market listing or further investment rounds at a higher valuation.

- Are you offering enough company shares in order for the investors to have some say in the company? A profitable investment without significant control might not be enticing for some investors.

- You have mentioned collaborating with another stealth start-up. You shouldn't appear as dependent on another company. Even having a large client as a significant fraction of your revenue can be considered as negative.

With all that said, it is a competitive market influenced also by macroeconomic conditions and fund cycles for the investors.

If you are already profitable, have confidence, and some personal financial stability, debt funding might be a good option for you.

logotype · 2h ago

Thank you, this is very helpful! Will keep this points in mind. Regarding exit, yes that is certainly one outcome. But it’s not something that we have mentioned in any of the pitch materials. Regarding shares I’ve followed the YC standard.

dustingetz · 4h ago

you’re playing a very competitive game, i recommend working with a coach, many on linkedin with accelerator experience it will cost you about $5-10k and you’ll get accurate feedback about where you stand. i spend more than that on advisors each year. raised a mil need more

logotype · 2h ago

Thank you, I haven’t thought of this. Will look into it!