One of the joys in my life is the pleasure I derive from mentoring and advising various early-stage entrepreneurs here in Atlanta. Of course, the vast majority of it is pro-bono, much to the chagrin of my wife. Nevertheless, I am usually not at a loss for good “startup” stories. I’ll try to share some of these moving forward (keeping an eye toward confidentiality, of course.)

One of the companies I am working with is an enterprise software play. These guys are still very much in the embryonic stages, having been funded solely by the wallet (and credit cards) of the founder. I serve as an advisor to the company, and the other day, I stopped by his office to get an update on things and see how I could help them get to the next level.

It is important to point out that this company is pre-prototype still (and obviously pre-revenue). They are very cash strapped and are seeking to raise an outside round of capital. The CEO also doesn’t yet have a track record in building new companies - this is his first - although he does have a great amount of industry street credibility.

The CEO informed me that they had a quote from a firm in India for $20K to build a Flash marketing demo. This demo would give potential investors an overview of how the product will work, and how companies can best utilize it. Ideally, the presentation would be shown during investor pitches, embedded within the Powerpoint slides.

I then asked the CEO how much capital it would take to actually get the prototype out the door. The answer? About $30K and about three months worth of work (also using an offshore team).

Suffice it to say, I recommended he abandon the Flash presentation project and build the prototype instead. Show-and-tell is far more important when dealing with investors. They want to know whether or not you can execute, not build fancy marketing presentations. After all, customers are going to pay or a product/service, not a pimped-out marketing pitch.

Additionally, investors are going to ask the same question I did. How much will it take to get the prototype out the door? I don’t know any investors, desperate or otherwise, that are going to infuse capital into a company that burned $20K on a marketing pitch, and missed out on an opportunity to cover two thirds of their development costs for their prototype.

Unless your requirements are sufficiently complex, or your founder is a proven, bankable entrepreneur, this is really the only path forward in such situations.

Just do it. You cannot market what you do not have. Focus on getting a bare-bones, end-to-end prototype out the door. Use that as the carrot for investors. It demonstrates your passion and commitment to the project, and more importantly, your ability to execute and hit those critical early milestones.

Cheers.