Every day I ask entrepreneurs how much they are raising.
Most begin with the big number–the full and complete raise they anticipate to run. This ranges usually between $1m and $10M.
It’s good to have the big picture in mind.
Some actually consider raising it all at once because “they want to get the fundraising out of the way.” I remind them that raising too much money on a round will cost you equity that you don’t have to give up.
Your valuation is low at the beginning. It’s best to raise only the funding you need to reach the next milestone, and no more. As you grow the business, your valuation will go up and you’ll give away less equity.
Consider breaking your fundraise into tranches. It will save you time and make each fundraise easier.
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NOTE: Investor Connect is a program under the Texas Open Angel Network which is a 501(c3) non-profit dedicated to the education around startup funding. Hall Martin is the principal contact, and may be reached at http://www.investorconnect.org/contact.
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.