We will add another 3-4 customers in another month. I want to raise a super angel round for 700K. I have no idea how to go about it. What should I do? How much dilution should I expect?
Are you generating 50k a month now or is it a total of 50k over 5 months? Depending on your investor they will value your business in one of two ways. How long are your contracts guaranteed? How do you intend to use the money?
I have never worried about dilution in a business as its more important to make whatever % of ownership you have worth the maximum amount possible. You might own 75% of company worth 1 million dollars but you might also own 50% of a company worth 3 million if built properly.
You can structure a capital infusion deal 100 different ways. Are you looking to only give up equity? What if your investor got his investment $$$ back in an 80/20 preference on free cash flow and took a smaller %. My advice is to focus on exactly what you need the money to accomplish and what value the business will have based on that infusion. Create a monthly rolling forecast for both expenses and revenue as a starting point. Good luck. Raising money is not easy and you really need your business plan buttoned up. Happy to help if needed.
Answered 10 years ago
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