In raising funding, there are two key drivers to how much a startup can ask for funding.

The first is traction.

The greater the traction, the more the startup can ask in a fundraise.

Traction includes current revenue run rate, quarter-over-quarter growth, and recurring revenue.

The second is founder experience.

Successful serial entrepreneurs with exits can use their reputation to raise more funding than the traction indicates.

At the preseed level, successful founders can raise several million dollars more.

This works particularly well if the founder is running a proven business model with a team that has done well previously.

Experienced founders can also raise additional funds based on their reputation.

This may be more in the order of $500K to one million dollars of funding.

Consider using your team’s startup experience and track record to make the case for a greater fundraise.

This can be most helpful in the very early stages of the fundraising process, where there’s little to no traction to reference.

 

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.
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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.