Looking to secure software startup funding? How to get to ‘Yes’

As a software founder, one of the most critical moments you’ll face is trying to secure software startup funding. Whether you’re a startup or growth-stage company, raising capital is very often a pivotal part of your business growth. Having worked on over 200 innovative software products in the last 15 years, I’ve seen firsthand what works — and what doesn’t — when it comes to securing funding.

Today, I want to focus on product clarity and why it’s key to winning over investors. Sure, having a solid pitch and business plan is crucial, but investors are particularly interested in two things: the product and the people behind it. I’m going to share some insights that can help you approach these conversations with confidence.

Types of Funding for Software Startups

First, let’s start with the basics. When you’re looking to raise capital, there are a few different funding paths you might consider. Early on, many startups rely on bootstrapping, which often involves self-funding or raising small amounts from friends, family, or early angels. As you grow, you might look at seed funding, which typically involves angel investors or smaller networks, especially if you’re in an area like DFW, where there are some great angel groups.

Then you get into venture funding—Series A, B, C, and beyond. These are much larger, institutional raises and come with more formalized processes. Whichever path you’re on, one thing is consistent: the clearer your plan, the more confidence you’ll inspire in investors.

Two Main Barriers to Securing Software Startup Funding

When you’re preparing to speak with investors, you’ll encounter two major categories of concerns: concerns about the founders and concerns about the product.

1. Concerns About the Founder

I coined a saying that I come back to over and over again — clarity is the antidote to risk.

It’s no secret that 90% of startups fail, and investors know this. They want to minimize risk. And guess what? The antidote to risk is clarity. The more you can show a clear, well-thought-out plan, the more you reduce the perceived risk in their minds.

Investors want to know that you, as a founder, have a clear vision. But even more than that, they want to know that your vision comes from a place of research, data and insight… not gut feelings. They want to see earned confidence, and that comes from clarity. If you can confidently explain what you’re building, why you’re building it, and how you’re going to make it succeed, you’ll remove a lot of their concerns.

2. Concerns About the Product

The second major concern revolves around the product itself. Investors will question whether your product is viable. Is it unique? Will it stand out in a crowded market? Will users actually adopt and love it? Does it actually solve a valuable problem? How would users deal with that problem if your solution didn’t exist?

Again, having clarity around these types of questions helps to alleviate investors’ concerns.

Product Clarity: The Key to Building Investor Confidence

So how do you build that clarity around your product? It comes down to answering key questions, and I’ve identified 10 that you should feel very comfortable answering before walking into any investor meeting. Let’s touch on a few of the most important ones:

Who Are Your End Users?

You need to know who your product is for, plain and simple. Be very clear about who will use it and who will benefit from it. And remember, the user isn’t always the buyer. For example, in B2B products, the person who uses the software might not be the decision-maker. You need to think about both personas — the user and the buyer — and make sure you’re addressing both.

Why Will Users Love Your Product?

This goes beyond building a Minimum Viable Product (MVP). I’m a big advocate for what I call the Minimum Lovable Product (MLP). The MLP focuses on creating something that users won’t just tolerate — they’ll love it. It doesn’t have to be big or complex, but it does need to solve a real problem in a compelling way. If users love your product, that’s a strong signal to investors that it will succeed.

What’s the Key Differentiator?

Investors will want to know how your product stands out from the competition. What makes it unique? What problem are you solving that hasn’t been addressed, or what are you doing better than anyone else? You have to be clear about what sets your product apart.

The Rest of the Story

For the other seven questions you should be able to answer, check out the full video presentation below:

I delivered this keynote on a panel at Dallas Startup Week and recorded a video version after the fact for folks who weren’t able to attend. It has all the detail you need to get to ‘yes’ when trying to secure software startup funding.

Clarity Helps Fuel Funding

At the end of the day, it’s all about removing ambiguity and showcasing your product vision with confidence. The clearer you are about your product, your market, and your plan, the better chance you’ll have of securing the funding you need to grow your business. It’s not just about having a great idea — it’s about showing that you can execute that idea.

Toward the end of the video we break down the six assets that can help you achieve the clarity you need to secure funding (they’re also the deliverables from our Innovation Lab, which is how we help startups and enterprises alike achieve the clarity they need to build software users will love).

I hope you found these insights helpful. If you’re preparing for an investor meeting and want to dig deeper into how to get clarity around your product, feel free to reach out — our Innovation Lab could be the missing ingredient between you and that next raise.