Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
In raising funding it’s best to break the raise into milestones rather than raising the entire amount of funding in one go.
Milestones are typically broken out as follows:
Raise $250K from family and friends to build the initial product and stand up the business.
Raise $500K seed round from angel investors to finish the product and start engaging customers.
Raise another $500K from more angel investors in a seed+ round to fill out the team and solidify the business.
Raise $1M to $3M from venture capital to grow the revenue.
If you raise too much funding at the start of the business you’ll end up giving away too much equity.
It’s best to tranche out the raise and increase the valuation at each step.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
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Hall T. Martin is the Director of Investor Connect which is 501c3 non-profit dedicated to the education of investors for early stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.