Does Your Side Project Really Need Funding?

Does Your Side Project Really Need Funding?

A simple system to decide if raising funds is the best way forward, and what to do next if it is

Does Your Side Project Really Need Funding?
Image source: Crunchbase

Deciding to raise money for WorkMap (my previous startup) was the hardest and most challenging part of the process.

In the beginning, it was all about the content marketplace. However, one day, a user said they loved the product as it helped them keep updated with content from experts and suggested some feature updates that I happily added to the pipeline. Before that, it was only a fun project I thought would be helpful for myself.

Even if I considered expanding or adding more features that the users were looking for, my biggest challenge was improving the build, which would require me to hire developers as I’m a non-tech founder.

That meant I had to look for investors, and dhell, hiring developers can be expensive, especially when I wasn’t even sure if that’s the product I wanted to work on for the next few years.

Many of the multi-million or billion-dollar companies around us were at one point a humble side project — Product hunt, Twitter, Gumroad, Github, Instagram, Slack, and more. It’s good motivation and shows that everyone started from somewhere and did not know if their side project would be the next unicorn.

Going back & forth between keeping the project as a side thing or seeking investment to take it to the next level left me pondering a big question.

Until now, I’ve successfully bootstrapped my product or worked on a scrappy MVP using No-code tools. This isn’t uncommon — most side projects don’t need investments. To understand if you need investment, define why’s:

  • Are you building a technology that would take months, or are you not an expert in building it? If you aren’t a developer, you’ll need an engineering expert, or if you aren’t good at distribution & you need a marketing or sales expert.
  • You want to see growth & build a team. When you see good iteration and more customers are coming, keep a hold on it & to expand it, you need help from a solid team.
  • Ask yourself why you’re building it. Don’t say something like “just for fun”. Does the idea solve your own problem, or have you found a loophole in the existing product? Do you already have users asking more about it or paying for it?
  • Imagine how you would see your product in the future. See if you have bigger goals, a purpose to serve, and you’re ready to start from smaller ones.
  • When you aren’t 100% sure if that’s the job you want to do for the rest of your life and you take the risk to go the other way.

You’ve bootstrapped your project for so long, which means you’re good with the limited resources, so why’s are important. Because once you bring investors into your business, it’s no longer only about your product, it’s a lot of responsibility, and you can’t quit that easily.

When you bootstrap, you’re responsible for everything in your startup and don’t have to give accountability to anyone. But when someone puts their money into your product, the responsibility changes, and it’s no longer only about you.

When working alone, if things don’t work out great or out of some circumstances, you no longer wish to move forward with the idea. You don’t have to explain it to anyone. But that doesn’t apply when you work with investors.

So, when you want to raise, don’t do it until you really want to.

Sit down and understand why you need investment. Where are you going to put that money — is it hiring more people, advertising, marketing, expanding, etc.? You’ll just cash out quickly if you don’t know where to put your money. And that happens with most of the founders.

But let’s say you’re all prepared, have tested the water, and want investment to move further.

What’s next?

You need a decision on a specific number. I was only looking to cover the cost for developers, so I calculated based on that. I did my analysis, talked to a few developers and landed on an amount that would help me build the next version.

Don’t look for millions if your product only needs a few thousand. The approach changes completely. When you know the amount you want, you’ll be looking in the right direction:

  • Target the right investors — angel investors, crowdfunds, VCs, etc. (see below).
  • Having too much money or too little money can destroy your product — What if you need $100k and you only raised $50k? How are you going to cover up expenses? What if you only needed $50k but raised $100k? Do you know how to manage the funds? For this, see where you’ll be spending money — development, marketing, team, sales, ads, etc. Have an estimate of every area you’ll spend money on and then add 25% more to it.

Start by describing the product goals (the first milestone), and what it will take to reach there, and then define an estimated time you’ll need to reach the goal. Say you need 18–24 months to reach the first milestone, then be prepared to raise enough that lasts for 24–30 months.


  1. Because things don’t go as planned most of the time. If something holds up, you don’t want to start looking for more funds in between
  2. Even if you reach your goals on time, you’ll need enough cash to start working on the next milestone before raising another round or at least thinking about it.


When I gave my first pitch, I made some mistakes, but after a few intros, I changed it to improve it. Though most investors don’t give you a reason for saying “no,” after a while, you understand where you’re going wrong (analyze based on the questions they ask you).

Before investor even decides to show some interest in your product, they’ll see your pitch. Then, when you email them, if you can’t hook them with the one-liner or introduction, they won’t even open your pitch.

So, a one-liner is your ride or die.

When going with the email intro, be good with the following elements:

  • Product name and one line to describe your product. Make it small & cut the crab.
  • Describe the problem it solves in one line.
  • Has it gained any numbers or stats, MRR, ARR, users, etc? Show the traction.
  • A sentence about the market & future opportunity.
  • If you have a prominent team member, add them (optional).

Remember, you aren’t selling your product to investors as a user, but you’re asking for their money. You are not trying to convince them to use your product but showing them how people love using your product and why they should invest in it.

So, make sure your one-line is helping with it and leave the investors wanting to hear more.

Here’s an example of a cold email to send: Meagan James is the founder of SaaSco, which helps marketers create a marketing campaign based on an AI mechanism. The tool will ask some questions and automatically create which marketing campaign will work for the brand. Since its beta launch a few months ago, it has grown the user base by 10% weekly and has already featured in xyz in the US. The product charges a $20 monthly subscription fee and is tackling a $10B market. I’m raising a seed round and would love to talk to you.

Prepare a deck

Once you get the investor interested, you need to be ready with your pitch deck. Usually, you’ll have to visit (also virtually) and present your product to hundreds of investors before hearing yes from a few.

Here’s what to keep in mind when preparing your deck:

  • Mention problems you are solving through the product and the solutions.
  • If you’ve already created the product, show the prototype. Show some images of your product or how it works.
  • Talk about your users and target audience. If you’ve already got a list of users and have some paying customers, show the numbers. (Because numbers and stats make a huge effect)
  • List of competitors, because you have them, and why you’re better than them.
  • You’ll get only a few minutes to pitch your product, so make sure your slide is small and covers the important parts. Don’t make it longer than 10–12 slides.
  • In the end, show how much you want to raise and what your terms are.

Watch this video on how to create a pitch deck 👇🏻:

As I’ve said before, the total amount of funds you need will define the type of investor you’ll need. Here are four areas you can start your search:

Fellowship programs

There are plenty of grants and fellowship programs in every industry, even those that specifically fund niche-based founders. This is the best option if you’re looking to raise less than $10k. Product Hunt and OnDeck are some examples.


Crowdfunding is taking a small loan or capital from a large number of investors/individuals at the same time to invest in the business.

Angel investment

Angel investors are individuals with extra cash in hand. You can find each for a specific industry. If you’re building a community-led product, Lolita Taub and Greg Isenberg are the ones to reach out. They look for businesses that have the potential to grow and invest their money accordingly. If you’re looking for something less than $100k, reach out to angel investors.

VC investment

VC is a private equity financing option provided by venture capital firms or investors to new companies with the ability for long-term growth potential. You can raise multiple million-dollar rounds through VCs — YC, 500 Startups, Hustle Fund VC, Initialized Capital, etc.

I’ve created this first-time founder’s resources where you can find a huge list of investors of all types with how to contact them and more information.


I did get one investment, but as I’ve said before, investors are a big responsibility. They have their pros and cons. It can leave you never wanting an investor or raising several seed rounds. I never thought that one side project I started just for fun would be a whole new experience in multiple ways, and that too, within a year.

Go to Publisher:

Entrepreneur's Handbook – Medium

Author: Ritika Mehta