Qualify Your Investor

I can't tell you how many pitches I've taken where a founder told me they needed revenues, or a fully functioning product to raise capital--and they were told that by X number of investors, so they took it as gospel.  

Plenty of companies have raised money pre-revenue and pre-product, so why the discrepancy?

What you're most likely hearing from an investor who says this is that what it takes to raise from *them* and they're not speaking for the whole market.  I always qualify these kinds of statements by saying, "I can't speak for other investors" when I suggest how likely someone is to raise in their current state.  

When you sit down with an investor, just like when you sit down with a customer, you need to qualify them--to ask whether or not they have invested in a startup at this stage.  This way, if they've done pre-revenue or 10k MRR a month or pre-FDA approval before, you know that if you get turned down, it's not because it was too early for them.  

Otherwise, you really don't know if they're suggesting the bar is higher then where you are because they just don't take risk at this stage.  

Some of my best investments, like Canary, Orchard and goTenna, were pre-product, but not every VC wants to take that type of risk.  Make sure you know you're pitching to the right stage VC when you go out.