Money Illusion

The money illusion effect is defined by Wikipedia as the tendency to concentrate on the face value of money rather than its value in terms of purchasing power.

In pricing the product, a startup should list their product price in the smallest unit possible such as daily cost rather than annual cost.

For example, if the price of the product over a year is $2000, then list the price as $5 per day rather than $2000 per year.

The smaller dollar number will attract more customers.

Startups raising funding should focus on what the funds will buy rather than the dollar amount alone.

In fundraising, the founder needs to take into account the impact of inflation.

Funding buys services that build a business and grow it.

Inflation eats into those funds and reduces the runway of the company.

Founders should keep in mind the impact of inflation on their cash runway.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

---

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.

Copyright (c) 2024, Hall Martin and investorconnect.org. All rights reserved.

Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit 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 for the basis of investment decisions.