From interest to commitment
What investors looked for before the product reached market.
The situation
I recently spoke with the founders of a medical hardware company working to reduce diabetic foot amputations.
The founders shared this story because they thought other hardware founders might learn from it.
By the time we discussed this part of their journey, they had already spent years understanding the problem, developing prototypes, raising capital, and building toward a commercial product.
Like many healthcare hardware companies, they were operating in a regulated environment. They couldn't launch the product, start generating revenue, and use sales as proof that the market existed.
At the same time, they still needed to raise capital.
The plan
The company needed to show investors that customers wanted the product long before customers could buy it.
The founders spent time speaking with podiatrists, healthcare providers, and health systems. Those conversations helped shape the product, but they also determined whether organizations would be willing to use the solution once it became available.
As those conversations progressed, the founders started documenting interest more formally.
Rather than relying on positive feedback or verbal commitments, they worked with healthcare counsel to create Letters of Intent that outlined how organizations expected to use the solution and what a future purchasing relationship might look like.
The goal went from revenue to generating evidence that customers would be willing to buy.
Where uncertainty remained
One of the more interesting parts of the conversation was that many of the signals founders typically rely on weren't available: no recurring revenue, no customer retention, no growing sales pipeline.
The company was still working through product development, regulatory requirements, and manufacturing preparation.
Yet investors still needed confidence that demand existed. The challenge became figuring out what evidence could stand in for revenue while the company was still preparing to enter the market.
What needed to be proven first
Over time, the founders found that structured Letters of Intent became one of the strongest signals they could gather.
The documents were non binding, but they forced much more specific conversations.
Instead of asking whether a customer liked the idea, the discussion became:
- How would this fit into your workflow?
- How many patients would use it?
- What would implementation look like?
- What would you be willing to pay?
When healthcare organizations were willing to put those answers in writing, it created a higher level of confidence.
The founders were proving that customers intended to buy once the product was ready, which became important throughout their fundraising journey.
The pattern
This situation comes up often in hardware. Many founders assume that proving demand starts when a product reaches the market.
In reality, demand is often being validated much earlier.
The specific evidence may look different depending on the business. Sometimes it's pilot commitments, pre orders or Letters of Intent.
The common thread is that customers are demonstrating a willingness to take a meaningful step forward before the product is fully commercialized.
If you're in a similar spot
If you're building a product that won't generate revenue immediately, it can be useful to ask what evidence would convince you that demand exists before launch.
The answer may not be revenue. It may simply be finding a way for customers to demonstrate commitment earlier in the journey.