Sitemaps

Questions

Funding

I am a startup founder with 5 customers (50K revenue in 5 months) for a a B2B SAAS product.

We will add another 3-4 customers in another month. I want to raise a super angel round for 700K. I have no idea how to go about it. What should I do? How much dilution should I expect?

Answer This Question

3

Answers

Doug Reichel

Digital Marketing, Biz Management, Software Dev

Are you generating 50k a month now or is it a total of 50k over 5 months? Depending on your investor they will value your business in one of two ways. How long are your contracts guaranteed? How do you intend to use the money?
I have never worried about dilution in a business as its more important to make whatever % of ownership you have worth the maximum amount possible. You might own 75% of company worth 1 million dollars but you might also own 50% of a company worth 3 million if built properly.
You can structure a capital infusion deal 100 different ways. Are you looking to only give up equity? What if your investor got his investment $$$ back in an 80/20 preference on free cash flow and took a smaller %. My advice is to focus on exactly what you need the money to accomplish and what value the business will have based on that infusion. Create a monthly rolling forecast for both expenses and revenue as a starting point. Good luck. Raising money is not easy and you really need your business plan buttoned up. Happy to help if needed.

Answered over 9 years ago

Noam Kostucki

Loving Money, Growth and Humans

It all depends on the state of your company and your negotiation power. Questions to explore will include:

• How long have you been in operation?
• What is your growth rate?
• How many people in your team?
• What is the value of your assets? (physical + intellectual)

I'm in the process of doing pitch coaching for 30 startups raising $750k and $6M, and the accelerator has already asked me to do another round of pitch coaching for them in September.

The basic principles for raising funds always the same:

1. Cut the crap from your business plan, your strategy and your pitch.
2. Build relations with investors so that they trust you and your business.
3. Pitching to investors is not selling your product / service, it's selling your company and yourself as an entrepreneur.
4. Prepare yourself 10,000% so that you are ready for all eventualities

1. Do you want some help preparing your company for investment?
2. Do you want some help with preparing your pitch to investors?
3. Do you want some help with reaching out to investors, build relations with them and ask for investments?

Answered over 9 years ago