The Lean Hardware Startup
FINANCING

#LeanHW
Cyril Ebersweiler
Benjamin Joffe
Cyril Ebersweiler / 希雷 / シリル
Partner/ Founder

Mentor / Speaker

Investor - Software

+50
Investor - Hardware

+43
2014: year of hardware?
0

HW BACKERS
200,000

6
4.5

100,000

3

93,870
2.09

50,000

1.5

1.33
19,181

0
HW PROJECTS

2011

HW PROJECTS %

1.57
...
2x Startups
First half 2013> Total 2012
HW Funding

TOTAL $M

500
446

375

250
209

125
94
52

0

2012

2013 (RR)
Life of a Hardware startup
1. Concept
2. Minimum Functional prototype (MFP)
3. Complete Functional Prototype (CFP)
4. Desi...
How fast can you get to market?
(every $$$$ matters)
Lean Hardware Rules
From Prototype to Production
“No hardware plan survives contact with a factory”
1.Design with the righ...
Life of a Hardware Startup

CONCEPT

MFP

CFP

DFM

FFR

RETAIL
Concept
Targets
• Become a master of the problem
• Customer development (interviews, customer
journey, core need identifica...
MFP
Targets
• “It works”
• Off-the-shelf, 3d prints, handmade parts
• BOM 10s of $ to thousands
Financing
• Bootstrapping,...
CFP
Targets
• “It looks real!”
• Get ready to talk with suppliers
Financing
• Bootstrapping, Angel investors, Accelerators...
DFM
“No hardware plan survives contact with a factory”
#1 rule of Lean hardware

Targets
• “Ready to roll” (& crowdfund)
•...
Evolution of the Leap Motion Controller
FFR
Targets
• “Make the things”
Financing
• Angels, Crowdfunding, Crowd- investing, Pre-sells
• VCs (need $M pre-orders if...
Retail
Targets
• Sell online
• “Get in the store!”
Financing
• VCs
• Pre-orders
• Bank credit lines
• Factoring
• Supplier...
Life of a Hardware Startup
•

A category leader will require large
amounts of capital

•

Pick your battle: single hit, po...
The Lean Hardware Startup
FINANCING

#LeanHW

www.haxlr8r.com/apply

Cyril Ebersweiler
Benjamin Joffe
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The lean-hardware-financing

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An overview of where is the money when it comes to building a hardware startup.

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The lean-hardware-financing

  1. 1. The Lean Hardware Startup FINANCING #LeanHW Cyril Ebersweiler Benjamin Joffe
  2. 2. Cyril Ebersweiler / 希雷 / シリル Partner/ Founder Mentor / Speaker Investor - Software +50 Investor - Hardware +43
  3. 3. 2014: year of hardware?
  4. 4. 0 HW BACKERS 200,000 6 4.5 100,000 3 93,870 2.09 50,000 1.5 1.33 19,181 0 HW PROJECTS 2011 HW PROJECTS % 1.57 248 121 0.46 0.59 2012 2013 0 2 365 0 0 195,449 5.83 150,000 0 0 HW BACKERS % 1.5 1 0.5 0 365 Projects (1.5%) 195,000 backers (6%) >2x in 1 year!
  5. 5. 2x Startups First half 2013> Total 2012 HW Funding TOTAL $M 500 446 375 250 209 125 94 52 0 2012 2013 (RR)
  6. 6. Life of a Hardware startup 1. Concept 2. Minimum Functional prototype (MFP) 3. Complete Functional Prototype (CFP) 4. Design-for-Manufacture (DFM) 5. First factory run (FFR) 6. Retail
  7. 7. How fast can you get to market? (every $$$$ matters)
  8. 8. Lean Hardware Rules From Prototype to Production “No hardware plan survives contact with a factory” 1.Design with the right components 2.A prototype is ready when it can be manufactured 3.Your factory is your most important partner 4.Be memorable 5.Pick the right business model # "$$ "# ! #&% %
  9. 9. Life of a Hardware Startup CONCEPT MFP CFP DFM FFR RETAIL
  10. 10. Concept Targets • Become a master of the problem • Customer development (interviews, customer journey, core need identification, etc.) Financing •Bootstrapping (your money, grants, etc.) •Fundraising almost impossible (track record?) •Investors want to see something that works
  11. 11. MFP Targets • “It works” • Off-the-shelf, 3d prints, handmade parts • BOM 10s of $ to thousands Financing • Bootstrapping, grants, FFF (50K) • People will think it’s the final product
  12. 12. CFP Targets • “It looks real!” • Get ready to talk with suppliers Financing • Bootstrapping, Angel investors, Accelerators • VCs still unlikely
  13. 13. DFM “No hardware plan survives contact with a factory” #1 rule of Lean hardware Targets • “Ready to roll” (& crowdfund) • Identify supplier, negotiate, reduce fees • Master your BOM... and your profits Financing • Bootstrapping, Angel investors, Accelerators • Crowd • VCs might listen (at least looking)
  14. 14. Evolution of the Leap Motion Controller
  15. 15. FFR Targets • “Make the things” Financing • Angels, Crowdfunding, Crowd- investing, Pre-sells • VCs (need $M pre-orders if you crowdfunded)
  16. 16. Retail Targets • Sell online • “Get in the store!” Financing • VCs • Pre-orders • Bank credit lines • Factoring • Supplier • Revenue-based financing
  17. 17. Life of a Hardware Startup • A category leader will require large amounts of capital • Pick your battle: single hit, portfolio, platform or ecosystem • Success isn’t binary with hardware
  18. 18. The Lean Hardware Startup FINANCING #LeanHW www.haxlr8r.com/apply Cyril Ebersweiler Benjamin Joffe
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