How To Raise Funding With No Product

Ever noticed how AI founders raise insane amounts of cash before they've even got a product? I’m talking pre-revenue raises that would make your head spin.

OpenAI co-founder Ilya Sutskever's new AI safety startup just scooped up north of $1 billion. And they don't even have a product yet. This is how their current website looks…

Some people are calling it crazy. Others are scrambling to get a piece of the action. But here's the thing – maybe it's not as wild as it seems.

Why are investors throwing cash at ideas, not products? And how can we get some of these cash injections for our own companies?

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Fundraising with nothing

Why do some founders raise billions with nothing, while others struggle to raise a few hundred thousand with a profitable product?

Name in the industry, vast network of like-minded people and also having a expertise in the given field is a must have. But there’s more to it.

Vision is your currency: When you've got nothing tangible, your vision becomes everything. Paint a picture so vivid, investors can't help but see the future through your eyes.

Team is your trump card: No product? No problem. A rockstar team can be your golden ticket. Show investors you've got the crew to turn ideas into reality.

Market potential is your magnet: Big markets attract big money. Growing market attracts customers. If you're targeting a massive opportunity, investors might just bet on you to capture it.

Or here’s the longer version taken from Peter Thiel’s Stanford lecture:

FOMO is your friend: Do you think the investors passing on investing into Facebook or Google don’t feel like they missed out? They most certainly do.

Your goal is to create a sense of urgency around your product. If investors think they might miss out on the next unicorn, they're more likely to jump in early.

A good practice is to have a “it happens with or without you and you can choose to become a part of it now” mentality.

Storytelling is your secret weapon

Facts tell, stories sell.

When you're raising pre-product, your narrative is everything. You're not just pitching a business; you're selling a vision of the future.

Most important element is understanding your company’s enemy. No — these are not your competitors. This is the problem your company is solving.

Gamma is a great example for this — as you can see in the following post by it’s CEO Grant Lee:

The best companies have a clear enemy.

Here's why:

First off, your enemy isn't necessarily your competitor. It's the problem you're solving.

For Gamma, it's the blank page. That cursor blinking mockingly at you. The empty slide taunting your creativity.

It stops most people before they even start.

Having a clear enemy does three crucial things:

• It focuses: Everyone knows exactly what they're fighting against
• It resonates: They immediately understand the problem you solve
• It drives innovation: You're constantly looking for new ways to win

But choosing your enemy is tricky. It can't be too broad. "Bad design" is vague. It can't be too narrow. "Difficult-to-use design software" limits your market.

The “blank page” is just right for us at Gamma. It's specific enough to tackle. Universal enough to matter.

Having a common enemy for your customers and team to rally against helps shape your product decisions, your marketing message, your company culture, and more.

What's the real problem you're solving? What's the obstacle standing between your customers and success?

That's your enemy.

Name it. Understand it. Then go to battle against it.

OpenAI co-founder Sutskever's safety-focused AI startup raising $1 billion

Preventing AI from causing harm is a hot topic because of the fear of rogue AI. Many well-known people have addressed this as a rising issue that comes with a monopolisation and progress of AI.

Ilya Sutskever’s The Safe Superintelligence (SSI) aim is to develop safe artificial intelligence systems that far surpass human capabilities.

SSI has raised $1B from NFDG, a16z, Sequoia, DST Global, and SV Angel with just 10 employees and being pre-product.

I repeat. P R E - P R O D U C T.

So the real cheat code to raising a billion dollars is just founding one of the biggest companies of this era. Getting funded after that becomes a piece of cake.

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