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Jan 22nd, 2013 Share: Share on Twitter Share on Facebook Share on LinkedIn

The Validation Litmus-Test

You’ve built your (paper-) prototype, ran it past a bunch of people, refined it, ran it past more people, threw it away, rebuilt it, ran it past even more people… Now the questions comes: How much validation is enough?

The following method is courtesy of my dear friends at Pollenizer — and brilliant:

If the validation doesn’t make you so confident that you would happily borrow $10,000 from the bank to invest, then it’s probably not enough evidence to convince an investor.

Aim for investors risking perhaps 10 times the amount that you would be prepared to loan from the bank. Think about it. If you thought the business was so good that the investor has a really good chance of getting a big return, wouldn’t you just borrow the money somehow?

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