Questions

The safe answer from the startup community seems to be a simple "Yes", however, I think the answer to the question "How much are you raising?" can complicate things down the road. For example, lets consider a startup that has never raised funds. 1) They could really use a small investment of $10K so they can get an awesome angel investor on board. 2) They could use $500K to achieve product/market fit. 3) They could also easily use $1M to achieve product/market fit and add a few employees. The startup can come up with ways to use each of the above amounts. If one of the first questions the investor asks the entrepreneur is "How much are you raising?" and the entrepreneur says $250K are they missing out on options 1,2 & 3?

you should approach this question from the result you are seeking to achieve. Funds should be raised in quantum units which achieve the goal of raising the equity valuation of the company to set up the next funding target or to achieve break-even/profitability goals.

This is not a one size fits all question...


Answered 9 years ago

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