Students face unique challenges in trying to launch a business; one of the largest it funding. Although it seems as though this is a larger problem for students than for other startups, I think that may be a false assumption. Although students are young and therefore have limited credit and savings, they also do not have the responsibility of a family and mortgage, and they often have more access to funding from friends and family.
With that said, Scott Shane takes a look at the Pre-Seed Stage gap that often trips up young entrepreneurs and keeps a product from development.
The Pre-Seed Stage Gap in Student Ventures
Student entrepreneurs face an important obstacle in developing their ventures. They often lack the money to develop working prototypes.
It’s not surprising to see entrepreneurs seeking validation for their early stage ventures before they have developed a functional prototype.
Over the past three months, I have run four elevator pitch competitions on Northeast Ohio college campuses as part of the Burton D. Morgan Foundation’s PITCH U. None of the 12 entrepreneurs who took home prize money from the competition had a working prototype.
And these ideas were solid.
They ranged from an insert for helmets that offered better protection against concussions to a bracelet that shot mace to a collapsible heel for high-heel shoes to a foot pedal-powered mobile phone charger.
Regional angel investors who judged the competition thought the winning ideas were interesting. But since none of the business had a working prototype, they were all too early for the investors.
Most investors don’t want to …