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How A Product Video Can Increase Your Chances Of Raising Pre-Seed Investment

Illustration of coins as seeds and plants growing

By Darya Sesitskaya

Midjourney is a self-funded company with 11 full-time employees. Mailchimp started as a side project — originally meant to be a support tool for the web design services the founders were offering clients.

Startups like these have inspired us, showing that it’s possible to start building revenue at an early stage. This eliminates the need to immediately jump into fundraising your pre-seed round, which by itself has become more challenging.

A few years ago, a simple prototype would have sufficed to raise money. Now, it is key to provide tangible evidence of a successful application of the product, and a clear path forward.

One way to do this — and that worked really well for me — is creating a demo video of your product. This strategy helped me raise $580,000 in pre-seed funds, and in this article, I’ll share four tips so you can do it too.

Showcase today’s and tomorrow’s product

While today’s prototype is important, remember that investors are attracted to what something can be. A video could help you focus more on this big vision and explain, in a visually pleasing way, what you are going to build.

There are three key components of a digital prototype: Where the product stands now, the new capabilities that will be integrated after raising capital, and features that still need market validation.

Of course those prospective features you highlight must be achievable, since selling castles in the sky will only create future disappointment.

Think about users, not only investors

Darya Sesitskaya, founder and CEO of Shader
Darya Sesitskaya, founder and CEO of Shader

When creating demo videos, founders often think about how to impress investors. However, the demo is also a tool to test hypotheses with possible users. What is your product going to help them accomplish?

Something very valuable — and really helped me — is to show your video to them, gather feedback and make adjustments before presenting it to investors. This not only helps you achieve a better product-market fit, but also can build up a waitlist of people who are eager for your product to launch.

Test hypotheses

Social media gives you immediate access to an immense target audience. Nowadays, the three most popular channels among early-stage developers are X (formerly Twitter), Discord and TikTok. Leveraging these three platforms, you can test various product hypotheses, learn about your audience’s needs, and collect your list of early adopters.

The best part? All this feedback is free.

I do not recommend spending money on ads to promote your video. If you do this, the platforms’ algorithms will not promote your content organically in the future and your test results will be skewed.

Conduct independent research

Most investors love it when you’ve done your research. Yet, we all know that it is complicated to dig deeper into your target audience when your product is not ready.

Your demo video creates a gateway for you to interact with your potential customers. For example, you can give people on the waitlist the opportunity to have a call with the company’s founder. This direct communication is key to get firsthand insights, and refine your product and development efforts accordingly.

Final thoughts

Several companies have leveraged the power of demo videos, from high-growth companies like Peloton and Duolingo to emerging projects, like the Coolest Cooler, which used a demo video to raise $13 million on Kickstarter.

As a startup, crafting a stellar product video will enable you to understand your audience better and adjust what you have to offer based on what the market needs. This raises the odds of securing early-stage funding, especially in today’s venture world.

Darya Sesitskaya is an entrepreneur with more than 10 years of experience in product development and UX/U design at companies like Snap and Wannaby. As UX/UI lead at Wannaby, she spearheaded collaborations with Gucci and Adidas. Sesitskaya is now the founder and CEO of Shader, a startup launching a real-time camera AI app with text-to-AR effects, and no coding skills required.

Illustration: Dom Guzman

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