Earlier quoted context omitted.
It may be common but the more important question the investor will have is how soon and for how much you can sell the company (in other words how will you use the funds to create more value / reduce risk in the startup). There will be other terms associated with a funding that will have a significant impact on how much you make when you sell (for a reasonable range of exits). A couple of good sites for background on…
No investor ever asks you "how soon and for how much can you sell the company." Ever. And if they do, go elsewhere.
Ask YC: I'm pitching to an angel. How do I value my startup?
31–32 of 32 posts
Re: Ask YC: I'm pitching to an angel. How do I value my startup?
#32Earlier quoted context omitted.
I'd also shoot for more than a year's expenses. I've found investors like to hear you're aiming for 18-24 months. Consider that you have to essentially start seeking funding 6 months before running dry. If you aim for 1 year's expenses you work 6 months, then start on fundraising. Raise 18 months' expenses and you work for 12 before fundraising again, so you get double the progress for only 50% more money. And if you…
$100K is not enough to sustain two employees for an year. $50K is less than the annual average living expenses for a person. (Just do the Math, housing, insurance, etc.). I would strongggggggggly recommend to try raising something between 0.75M an 1M. I have noticed a lot of fellow hackers seriously undervaluing the time they spend building a product. Two strong hackers, working for 6 months is eaily $140K expenses(a…