

Ask HN: Are Angel investors interested on startups selling hardware? - gdltec

I see that many Angel investors are investing in many companies, however, it seems that most of these companies sell a software services. Is there any interest from Angels for startups with new and innovative products? Most successful tech companies sell hardware (i.e. Dell, Apple, HP, etc...)
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noodle
i'm not an angel, but i would think that at least some would be. depends on
the idea, just like software.

the problem of software vs hardware, though, is simply the fact that software
will scale easier than an item that you must manufacture/produce/distribute.
give someone $5k (for example) and a software company will probably be able to
run further with it than a hardware company.

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gdltec
It is a valid point. However, having a hardware product might help raise more
capital for the same reasons you mentioned above. Thanks!

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famousactress
You're saying needing more money might help raise more money? I suppose.
Hardware products are tough to bootstrap, and tough to flesh out issues with
before having volume... and they don't get software margins. That said, I'm
sure there's interest.. and it's probably inflated when the hardware is well
understood, and maybe driven by software margins (Square comes to mind).

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hga
How many or what class of hardware companies would angels have enough money to
make a difference in? Aren't we talking a difference between investing 5-6
figures vs. 7-8?

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gdltec
Remember, we are talking about seed stage companies, the money from an Angel
will help get at least a prototype out the door... and some PR depending on
the Angel.

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hga
Getting a processor/ASIC taped out and fabricated, even if you use MOSIS, it
not cheap. As I understand it, the cost of the necessary seat licenses for the
design and verification tools would be beyond what we think of normal (non-
Space X/Tesla) angel investments, even syndicated.

So, again, I ask "what class[es] of hardware companies would angels have
enough money to make a difference in"?

Or to repeat a question I've been pounding on, where will the next thing in
the class of the FPGA come from? As far as I can tell, the answer for the US
is that "the future isn't going to be invented here".

