Both options exist. Both may however NOT exist at the same time. And both options may NOT be relevant to you at all times.
In certain times, when the startup investing environment is vibrant and investors are looking for investments, there may be some who will bet on a ‘spray and pray’ model i.e. invest in many potential winners at very early stages and hope some of them make it big.
Also, launching and funding are related issues, but are NOT interdependent. You should launch as soon as you have a product that allows you to engage users in a meaningful way. I.e. if you are testing a new concept, a MVP should be good to go. However, if you are the 11th online music platform, the product better be great and awesome.
Now, whether you should raise monies at concept stage (powerpoint stage) or prototype stage or post launch stage, depends on a number of factors – including when you need the money; what the funding environment is; what the competitive environment is and what the funding is needed for, etc.
Irrespective of the stage you begin to raise the monies in, investors are going to check the following:
- Does the concept address a large market opportunity
- Is the product/service good and will it deliver in the marketplace
- Is this team competent and committed to doing this
If the answer to these three things is a Yes, then everything else can be agreed upon.