Angel investor · Fundraising

When do you decide to raise funds for your startup?

Vittal Ramakrishna Founder

Last updated on March 19th, 2018

We are a bootstrapped startup, launched exactly 2 months ago and started generating traction with revenue and users. We cannot scale using bootstrapped methods for sure, but we can definitely sustain for a minimum one year. Since we are few months old and launched, is seeking Angel investments now ( would take a couple of months in finding one) worth it or do you think we can wait till we value our startup a little higher?

PS: Angels do bring in more value than just money too

Appreciate every response. Thank you in advance

Edit 1: As per the business plan I was supposed to start generating revenues from May and seek investments by December. As per the current trend I might have to raise it earlier to scale up

Dan Hubbard Founder, www.FocusedAgility.Solutions/

Last updated on March 22nd, 2018

I visited your site, and I have some takeaways that in my mind (a surface view) make you unattractive to capitalize, to wit (in no particular order):

1) You're missing a Blog, but have a dead link for it. You REALLY need to get blog content and start hitting social media hard. Missing/no blog content makes it appear that you either are not doing anything worth letting the world know about, or worse, you're not doing anything;

2) You're missing news, which means you haven't anything exciting to share, and/or that no one finds you exciting;

3) You're not partnered with any non-profits/NGOs, which hurts your credibility that you donate proceeds;

4) It appears that you have a total of three projects; one funded, two not. If I understand your profit model correctly, even if all three were funded at their stated goals, your revenues wouldn't be enough to cover your yearly domain hosting fees. This part is HUGE. Investors are looking at your early adopters (you have almost none), buzz about your idea (there is none), and most importantly, they're looking for differentiation that will lead to ROI, and that takes me to my final observation;

5) I do not see anything that differentiates you in the marketplace. You present the same as dozens of other crowd funding sites. But what makes me particularly frustrated is that at the very beginning of your platform -- when it's easiest -- you didn't think to be better from a tech standpoint. Your website looks fine in Chrome and on an Android device, but you're not AMP, and you do not have a PWA option for Android mobile visitors.

In short, I feel like you need to go back to your MVP, go through SWOT all over again, develop a better tech plan, and decide if this is even worth pursuing. Then ask yourself if seeking funding is worth the efforts.

David M

March 19th, 2018

What does your business plan say? I ask this as a response to a lot of questions, because a lot of questions posted would not need to be posted if people had written out thorough business plans. If you had a business plan, you would be able to consult that and get a better feel for the dynamics of the current and future with your business.

BUT my belief and subjective opinion that others share and some I'm sure do not, is you are either growing as a business or Dieing. So what you see as maintaining for a year, I see as a year that you are giving your competition time to catch up. BUT, maybe your business is not that competitive, and for that it may make sense. I couldn't say without knowing more. And yes investors should always be seen as more than money. They will always play a role either directly or indirectly.

David M

Last updated on March 22nd, 2018

Yes Vittal, take advice from someone with 17 years working for the Federal government because clearly the Federal Gov't is competent in business! I kid...kinda. Not sure why people feel the need to come in and throw digs at people though...little absurd. And did I not say "My subjective opinion" ? I wish most people at the federal government actually DID read at a 5th grade level because that would be an improvement! *Rimshot* Sorry..its just too darn easy! But in all seriousness, my words were not "big" so it could be that the individual works at the federal government and that led her to find my words were "big." *Rimshot 2*

Ok I will stop because this is too easy and shamefully entertaining I admit. But on a serious note, I assure you the angels you approach would dismiss this individual's sentiment and all the investors I work with and know read well beyond a 5th grade level. None dismiss ANY discussion of working through a business plan in tandem with the market and outside world. As for Sequoia, Mark Steven's colleague and friend who I put together the business plan for his last venture sure thought "big" words of a business plan were pretty important when seeking investment. In fact his words were, "I can call Mark, but we need a solid business plan first." But everyone is entitled to his or her tone and approach and opinion. I just never took a road trip where I thought, "Having this map is so bad. Blast this map and everyone who thinks they are so necessary. Why did you think we need a map??!! Maps are worthless." BUT, I have gotten lost a few times and been glad I had a map, or now google maps. But you clearly have a business plan as you edited your original post. Which, shows you are competent in understanding that a business plan is used as a guide and offers a lot of answers.

Josh Blank Currently founding Otto. Looking for a technical Co-founder.

March 27th, 2018

David having been on the advisory side of capital raises and in the fundraising process myself the correct time to raise capital has been and continues to be before you need it.

1. You come from a position of power when you "don't really need." Too many times founders go out and begin to look at a capital raise when their runway is dwindling down. Investors can sense the urgency when you want to present scarcity. If the investor likes your business they'll try to get better terms because they know the position that you're in.

2. You have the opportunity to start building relationships early on in the process. If you have a firm or angel interested in your company before you need to raise capital you can begin by giving them monthly updates. You can look at it as founder/investor dating. You can ask their opinion on challenges your facing and give them updates on what's been working.

3. When you do decide to raise capital the process will be shortened. Yes, the investor will have to perform a more thorough due-diligence process before they invest however, they will already be comfortable with you and will have to perform less time becoming comfortable with the nuance of your business.

I would recommend reaching out to some investors in your space when you have some time to ask for advice. There's the other adage, "ask for an investment and you'll get advice" "ask for advice and you may find an investor" either way the advice you'll get from most good investors will help lead you and your team on a better path.

Hope this helps!

Avinash Rathi Technopreneur | Doer

March 21st, 2018

Well! Valuation is the most important thing. Now, if we talk about raising the funds, then it should be done strategically.

I would prefer, set a goal for the valuation of your startup and a deadline. Break down goal into targets. This will definitely grow your business and I'm pretty sure it will also increase your valuation and your growth figures will attract the investors.

Let me know if I'm wrong somewhere

Thank you!

David M

Last updated on March 22nd, 2018

Vittal, I looked at your website. Did not notice your web address earlier. My apologies. It looks good. I really like the aspect of philanthropy, and I would be interested to learn more about how that integrates with your business. I do think you can probably get to the point with a more concise and clear message of differentiation but don't write it for a 5th grader. I know that is colloquial advice that all the books say and business professors regurgitate in business school, but just think clear and concise. That was good advice by the other poster. Happy to discuss the film side. I have a lot of experience with that industry with small to larger independently funded films $2-30M as well as the studio system of films. As for your business plan, I have come across quite a few anti-business plan people in this forum, and I have to believe most have never put together a proper one that is in the 40 page length with detailed financials. They also do not understand that a BP is a living breathing document that you must evolve. So don't feel tied to what is in it originally. Change it as you go and just always work to meet timelines and milestones.

David M

March 22nd, 2018

I second everything Dan says especially if you are currently marketing it. When I said your website looks good, I meant general aesthetics as some don't even have that. But definitely need to differentiate it. Why are you different than the two big ones kickstarter and indiegogo.

Vittal Ramakrishna Founder

March 22nd, 2018

David M, Thank you for the feedback. Are you from Funded Today? I know a similar name. Cheers, Business plans are a must and yes we need to define them accordingly. Being a Business consultant myself for large industries, I have butterflies in my stomach about my own startup and business plans :) I assume it is mostly for all.

Dan: You beauty, your feedback is spot on. We have been working on our platform and its visibility continuously. Your honest feedback is what matters for us to adapt and respond. We are also taking in user feedback who use the platform to roll over our changes effectively. We will put out the USP in order to gain attention and clearly differentiate on our platform. I believe this has not been duly fulfilled. We are back on our drawing boards and planning out to focus on the pain points. Cheers

Avinash: Thank you for the feedback

David M

March 23rd, 2018

Vittal, Im not the same person. Happy to connect though and discuss further. As for butterflies, Im a firm believer that the line between arrogance and confidence is ever so fine. And if you are not walking it constantly, you are going to have people buck you one way or another. Generally, most entrepreneurs who channel their passion with objective evaluation and constructive criticism can keep from crossing into the arrogance. Butterflies are normal with any potential venture..means you care.

Rena Wells Federal Govt 17+ Yrs , Leader/Visionary, Business Analysis, Project Management, Systems Engineer

March 22nd, 2018

Hey Vittal. I'm going to give you advice that actually makes sense LOL Sorry big words and talking about your business plan isn't what you asked. With that being said... I checked out your website and to be honest I'm not even sure what you do? With that being said I would HIGHLY suggest getting your mission statement down to 1-2 sentences. 1 is better. I would also watch your sentence structure and keep things simple. Most people on the planet read at a grade 5 level (crazy right!?) As for financing with angel'Is it depends on who you are pitching to. I have several decks on the go right now and each one is different based on the investor. Align your pitch to the investor. There are Venture Capitals out there that fund from idea/concept (like Sequoia Capital) and much more seed funding happening so as long as everything is clear, and concise, you don't have to wait until you have more value. All the best!