In the traditional startup playbook, entrepreneurs typically develop a product, test it with customers, generate some sales, and then approach investors with data in hand. But Evan Quinn, cofounder and CEO of Hiyo, flipped this script.
While getting his MBA at UCLA Anderson in 2019, a personal crisis involving family members hospitalized with alcohol-related incidents led Evan and his cofounder George Youmans to identify a gap in the market. The white space they found? Quality non-alcoholic beverage options that could substitute for alcohol in social settings. This idea offered the promise of fun without the negative effects of alcohol.
Even before they perfected a product, Evan, George, and a third cofounder, Cygne Cooper, secured $1 million in funding based on the idea.
With this million-dollar investment, Hiyo was able to move quickly in the emerging “sober curious” movement and came to dominate the space.
How to raise money without a single product
See how Evan secured a $1 million investment before having a single product.
1. Leverage and take advantage of market timing
Evan went after an early investment to scale his brand before he had a single product. “The traditional route is to bootstrap it, you know, maybe you’re whipping something up in your kitchen and you’re fulfilling orders out of your garage. That kind of story.” But for Hiyo, speed was essential. “[We wanted to] go big out the gate, because there is a speed component to trying to get ahead of the adoption curve and getting yourself ingratiated in the category and in the space at the right time.”
Raising money before you have a product offers several advantages. Founders can capitalize on emerging trends before they become crowded with competitors, and they can do this without depleting their personal resources. The right funding at the right time, lets you focus on product excellence rather than marketing and immediate sales.
At Hiyo, this meant having the resources to formulate a functional beverage with adaptogens and nootropics that could create the relaxing “float” feeling the team wanted their product to deliver.
2. Build credibility, creatively
Without sales figures to prove market demand, Evan and his cofounders needed alternative ways to communicate credibility. “As part of my master’s thesis, I had four of the MBAs working alongside me on my [beverage] concept. And I also had access to 300, 400 students that were ready and able to do primary research and consumer data,” Evan says. The academic environment provided Evan with free market research, expert feedback from professors and mentors, a structured environment to test ideas without financial pressure, a network of potential investors, and most importantly, credibility.
Cygne all connected thanks to the UCLA MBA program.Hiyo
With Hiyo as his thesis, Evan and his cofounders decided to enter UCLA’s Knapp Venture Competition with their concept. Maybe not surprisingly, they won the competition and received a $40,000 grant. This grant created momentum, provided the initial capital to create a minimum viable product that provided third-party validation of the concept, and connected them with judges who later became investors.
Even without a final formulation locked, Evan recognized the need for something tangible to share. “[Investors] need to test it, right? If they’re older, they’re gonna have their kids test it and make sure their kids like it and give the approval.”
Their first production run, funded by the Knapp Venture Competition grant, gave investors something concrete to evaluate—even though this still wasn’t the product’s final form.
3. Pitch vision and market understanding, not just product
Without any sales data, Evan focused on three key elements in his investor presentations. First, he didn’t rely on his own assumptions about market potential. He leveraged industry research: “IWSR (International Wine and Spirits Record) was starting to kind of cover the sober curiosity movement, and so there’s a lot of things I can find online.” Showing investors that respected industry analysts were tracking this emerging category helped validate the opportunity.
Second, he emphasized that investor confidence in the founding team was crucial. “We were very confident in ourselves as entrepreneurs,” he explains, noting this confidence was a selling point in early fundraising. For first-time entrepreneurs without proven track records, this confidence can come from relevant industry experience, educational credentials, or a real commitment to solving a problem.
Third, rather than positioning Hiyo as merely non-alcoholic, Evan articulated a distinct identity—what the product was, not just what it wasn’t. “We talk about what we are. We celebrate people that are drinking less. We branded the feeling—we call it ‘the float,’” Evan says. This positive framing helped investors envision how the product would connect with consumers emotionally, beyond the functional benefits.
4. Embrace feedback and be willing to pivot
Hiyo’s fundraising journey wasn’t all smooth sailing. After securing about half of its $1 million goal, Evan noticed a pattern in investor feedback: “We love you. We love the concept. We love how you know the market. The product’s just OK.”
Many founders might have persisted, hoping to convince skeptical investors of their product’s quality. Instead, the founding team made a bold decision. “We took a step back and we’re like, ‘Wow, we’re not gonna be here to sell our product all the time. The product needs to sell itself,’” Evan says. “So we paused, we went and reformulated the product into what Hiyo is today.”
When they returned to the investors who had previously declined, Evan reports they “batted a thousand”—everyone said yes. Not only were they impressed with the improved product, but investors appreciated the team’s receptiveness to feedback and willingness to act on it. One of the judges from the competition they had won, who initially declined to invest because his family didn’t like the product, became one of Hiyo’s largest single investors after the reformulation.
5. Have patience
“[Fundraising] will take a lot longer than you think,” Evan says. “I’ve never penciled in, in my financial model, like an accurate assessment of how long it actually takes. It’s probably usually double.” Building this extended timeline into your planning is essential to avoid running out of runway before securing investment.
While some call it creating FOMO (fear of missing out), Evan describes the process more accurately as instilling confidence. “You need to aspire confidence in your investors, especially the early stage ones … make them gain confidence in you that you’re the right entrepreneur and you’re the right concept,” Evan says. Demonstrate an understanding of the market, a passion for solving the problem, and your ability to execute and adapt.
“The people you think are gonna invest, usually actually don’t. And the people that you don’t think are gonna invest, are actually the ones that do,” Evan says. This unpredictability means casting a wide net and not becoming discouraged by early rejections. Successful fundraising often snowballs through networks, “it’s really leaning on those that do say yes, [and] tree branching off of them,” Evan says.
6. Embrace a flexible mindset
Taking a balanced perspective allows entrepreneurs to maintain passion while remaining open to necessary changes. “I think it’s really important when you’re going through fundraising to have both a 30,000-foot view and a three-foot view where you’re so close to your concept,” Evan says.
Perhaps most importantly, Evan emphasizes the need for unwavering self-belief. “You need to have an insane amount of self-belief,” he says. “If you don’t believe that you can do something and your company can get as big as you, in your mind, make it out to be, it won’t get there, cause no one else believes it.” This conviction must be balanced with openness to feedback—confidence in your vision while remaining flexible about execution.
A pre-product fundraising approach can work across sectors, but it isn’t necessarily right for every business. When market timing is critical, development costs are substantial, or you have unique credibility through your background, raising money before you have a viable product is a fitting strategy.
By focusing on these elements rather than completed products or sales data, entrepreneurs can secure the resources needed to develop truly exceptional solutions rather than rushing minimum viable products to market with limited resources.
You have the opportunity to gather the resources and the runway needed to create something truly exceptional. As Evan puts it, “Entrepreneurship is amazing. It’s this growth mindset where you learn and you’re a problem solver. Every day you’re working on something that you love, [in order] to help people.”
Tune in to Evan’s full Shopify Masters YouTube video to understand the process behind bringing Hiyo’s first product to market, and expanding into retail doors nationwide!
