#StartupFundingJourney 💰 #FuturePlans 🚀
Hey there fellow startup founders who have successfully secured funding! 🌟 I’m super curious to hear about your journey – how did you manage to raise capital and what was your experience like? Let’s share some insights and maybe even brag a little about our accomplishments! 💪
But here’s the real question on my mind – what’s next for you? What are your future plans and how are you approaching your startup differently now that you have funding? Let’s dive into the nitty-gritty details:
🔹 How are you spending your capital wisely? 💸
🔹 What strategies are you implementing to start generating revenue? 💡
🔹 Are you looking to expand your team or launch new products/services? 🚀
I’d love to hear your thoughts and experiences so we can all learn from each other and grow together! Let’s share some valuable insights to help each other succeed in this exciting journey of entrepreneurship. 💼💡 #CollaborationOverCompetition #KnowledgeSharing
I’m a bootstrapper, but definitely interested in this discussion!
Don’t raise unless you absolutely must. Most startups don’t have to but sadly I see a lot of founders see fundraising as a goal or a success metric.
I raised more than I should (tens of millions) and that cost me my company.
Be very careful whose money you take. Some of them are snakes.
And in case my snakes are reading this, hey fuckers!
Bootstrapped until a Pre-seed of $1.5M to fully develop the MVP and begin user acquisition.
$5M Seed for product expansion + ML/AI training resources
$20M Series A for marketing + sales expansion, completion of intended product roadmap
$XXM Pending Series B for global rollout
We expect to be profitable next year.
Here are the few take aways:
1. The first round is the hardest. The subsequent rounds depend largely on your numbers. It becomes easier if everything goes well. If it doesn’t go well, you cant no matter how hard you try.
2. You need to approach like 100 VCs in about 3 months, and if you have good background like IIT, IIM. Then after 100 pitches, your probability of raising funds will be around 50%.
3. Raising money depends on lots of factors. Your idea, product, the domain, background, etc.
4. Top angels like Kunal shah, Ashneer grover used to invest in a lot of startups, before the funding winter. They both have invested in around 200-250 startups. They might invest with just 10 minutes of a call. Their check starts from few lakhs of rupees but having them onboard will help you in raising.
5. People don’t generally see the failures. You fail a lot of times, and but you need to succeed only once.
6. Funding is just the first step in the journey.
7. After the deal is done, it might take around 3 months for you to see the money in your bank. Lots of background checks happen.
8. You have the freedom to spend the money for whatever necessary things but its strictly audited.
9. Your salary after raising seed would be less than the market salary.
10. The bandwagon effect and FOMO is very real in the investment scene. Oh, your startup is in this new trending domain, its easier for you. Your startup is in the domain where investors have put money before and burnt their hands, its hard for you. For example, look at how many food delivery apps were funded at the time when it was a hot domain. Now, no one would invest in it. Similarly there are few trending waves in the startup scene:
1. Ed-tech, 2. FinTech 3. Social commerce 4. E-commerce.
Correct time in the correct place matters a lot.
11. Differentiate between a startup and a business. Even if you built a profitable business, you might have hard time raising funds. The difference between a business and a startup is the risk-reward ratio. You need to differentiate between the people who invests in startups and who invests in business. If you say, I have built a business which gives you 30% returns every year, it’s a good business but it need not be a good startup.
90% of startups fail after raising their first round. So raising funds should never be a goal. Its a helpful tool to build your company.
I know rich people, they gave me £100,000. I had planned on £60k, but then thought they can afford £80k as well but then last minute asked for £100,000 and got it. They’re on as angels with equity and a board seat.
About 15 years ago, I got funded with $1 million in financial instruments. How I did it was I picked up a telephone and I started calling the major players in the business that acted as underwriters. Within seven phone calls and five letters and about a weeks time I had a greenlight for $1 million in financial backing.
That’s how I did it. It wasn’t complicated. I had a valuable service that I could offer to a large insurance company, and therefore they were willing to back me through their intermediary.
Basically, I had intimate knowledge of a particular business, and I had intimate knowledge of particularly tough city to deal with.
These background stories don’t need to be difficult or complicated. They don’t need to involve a lot of struggle. You just have to have something of value to offer a large interest that has ability to because they have a lot of cash flow.
I know most of the companies in this forum are SAAS or some app. I’ve never done that so take what I say for what it’s worth. Every startup I’ve done for the last 20+ years has been funded by accredited investors. I generally raise capital through a 506 Reg D. Generally $8,000,000 – $10,000,000. The exit is always a reverse merger or self filing. Generally these companies won’t ever make it past OTC markets however some are successful and eventually uplist. My best deal was an $0.80 stock (pre-IPO) with two warrants that we got traded as high as $14.91. It eventually went bust in the Chinese stock fiasco years ago. All my investors got out between $11.00 – $13.00 a share.
All the companies start off as a rough idea. I write a business plan and Private Placement Memorandum (PPM). If the numbers work and the deal is viable I hire a couple telemarketers and write them a script. I buy leads of people that have looked at high risk, high reward investments. Things like oil and gas exploration, movie financing, pre-IPO stock, penny stocks, 144 shares, etc. I always structure deals in units of $50,000. Share price is always arbitrary (but has to make sense as far as projected stock price, shares outstanding, eps, etc).
It usually takes a few weeks to build up a pipeline before deals start coming in. I can generally do a couple hundred thousand monthly solo with a couple telemarketers, significantly more if I hire sales reps to replicate my efforts.
Ive had some big successes and I’ve had massive failures, but I can fund whatever idea I have next. Going forward I’m moving away from cold calling Reg D and more towards building landing pages and advertising on Reg A+. The accredited investor universe is getting pretty burnt out and it’s a lot more difficult than it used to be. Opening it up to non accredited investors is key IMO.
On my current project there’s no way I’m ever going to deal with OTC markets again. Too many MM games.