That’s why it’s a horrendous idea to take VC funding if you’re not looking to spend it fast, and take huge risks. If you want to be capital efficient, do that, then raise when you know you can spend the money and the ROI is “guaranteed” (meaning you have a successful sales and execution engine), because then you can do it on your terms.
Otherwise, you raise, lose control, and are beholden to VCs for your next dollar. Good luck with that negotiation; they have the leverage.
Profit and revenue gives startups leverage, in nearly every way.
I'd tell the investor they can do 5-10% at that, or better, a convertivle note w 20% discount and $3-5M cap and (A) pointing to YC and (B) pointing out no follow on investor would join if they did higher -- after seed/A/B, only 50-60% of co should be sold. If a real investor followed, you'd be stuck paying legal fees to wash out the angel investor.
This all assumes a scalable startup, not a consultancy etc
We decided not to take angel investment, took longer to build a small business, and gave equity to more founders.
We're very proud of our profitable centicorn (one hundredth the size of a unicorn).
I guess its not easy to qualify since they get a bazillion application.
Do you just apply on the web ?
Do u have good references ?
Is it "real revenue" or r u counting the nominal sale value ?
Also - if u r still on WP then 30% may not be too bad :/
But they want tax returns and credit score. Thank you and i will look into Lighter Capita. SVB is silicon valley bank?
Tax returns and a credit score for your business? Or are they asking for a personal guarantee?
As far as winning out vs competitors, efficiency can be key. There is no question there.
One of the things about frontier tech (autonomous, AR, sensor networks, ML) is that many people are funded and do it too early. So they need to somehow last.
Most startups spend the money within two years or less. It’s programmed into the psychy. A Sequoia would never admit this but they want you to spend your money fast and move on to the next thing if you aren’t growing fast enough. Buying one more year can be crucial.