How small are the chances of getting seed funding ($40K) outside of own country and where to look for it? (poor Angel/VC infrastructure in Bulgaria)

Before I get to your question, let me give you a tip: always aim settle questions of payment before the work happens. It is ten times easier to agree on a price beforehand, and having done that doesn't stop you from changing it by mutual agreement later. The problem with paying cash is pretty obvious: you don't have a lot of it. The problems with paying equity are subtler. The first one is that early-stage equity is extremely hard to value. A second is that equity transactions require a lot of paperwork. Third is that entrepreneurs tend to value their equity much higher than other people would; if not, they wouldn't be starting the company. And fourth, people like designers are rarely expert in valuing businesses or the customs of of startup equity valuation. In the past, I've both given and received equity compensation, and it's a lot more of a pain than I expected. In the future, what I think I'd try is convertible debt. That is, I'd talk with the designer and agree on a fair-market wage. E.g. 100 hours x $100/hr = $10k. The next time we take investment, the $10k turns into stock at whatever price we agree with our investors, plus a discount because he was in before the investors. Note, though, that this will increase your legal costs and your deal complexity, so I'd personally only do this for a pretty significant amount of work. And I'd only do it for somebody I trusted and respected enough to have them around for the life of my business.

I like the way you framed this question. Staying calm, always leads to better decisions being made. The best way to maintain a "calm" state is to do your best to look at your business from a completely detached view. Having a talk with myself or anyone else well-reviewed on Clarity can bring needed perspective, but some people can achieve the same analysis on their own. Questions you should be asking yourself: 1) What evidence do I have that I'm building something others need? Was I expecting to have more evidence than I currently have? If so, do I trust that I know how I can obtain this evidence within the next 30 days? 2) Do I have credible options to fund what remains to be completed to get real customers (not my friends or associates) to use the product and give feedback? 3) Are others working on this project with me willing to make the necessary sacrifices (deferring payment) to get us to the point where we can test with real customers/ If you're not scoring at least 2/3 with confidence, you should reach out to me or someone else on Clarity.

Hello, So usually; at least in my opinion, the best search for funding follows validation from the market, a certain amount of recurring revenue and proof that business works (and can scale). Do you have these?

First, congratulations on your recent funding/recruitment successes! This is an excellent question, and a transaction I have been directly or indirectly involved with numerous times before. Each circumstance can be unique, the two most important considerations to look at as a starting point would be 1) what is the current status of the technical product and 2) what is the current funding or capitalization status of the organization. Generally speaking though, the type of range you could be considering here could be in the mid to high single digits all the way to a nearly equal share in the venture as what you (the original founder) have. My gut reaction, based on your brief description, if that you are looking somewhere on the higher side of the range here (given the candidate, venture status and other data points you offered.) Getting to a firm and real number though will require some more analysis. So our challenge now, in order to answer this correctly, is to dive deeper into a few other details we need to uncover. To name a few: - Are they participating in an initial capital outlay/investment? - Are there any expenses of them joining the venture (moving etc) that they will incur? Who absorbs those costs? - How much familiarity do you have with this person prior to joining your venture? Have you worked with them directly? Have you spoken to anyone who has? - How critical is the tech stack they are supporting to your overall ecosystem now? - Is this CTO going to spearhead and participate in day-to-day development, or just own the roadmap/vision? o Are they a full stack developer? - What is the near and long-term vision for participation from your other employees? Are they going to be moving to FT status at any point in the near future? - What participation, if any, will this person have in the fundraising or sales process? - Beyond the current $40k investment and upcoming cash flow, what other capital inflow and outflow are expecting in the next 12 months? - What are your alternatives if this candidate didn’t work out for delivering the application? Would you pause this priority altogether or need to aggressively explore a new option in order to meet client demand etc? Once you establish these and other pieces of data, you can start looking at comparable plans out there and piece together what your starting/ending point is as far as comp terms you’d like to offer. It’s as important to remember that in addition to extending a number here, these are in fact negotiations and it is in your best interest to know what your strategy is with this candidate so you know how aggressive or passive to be in terms of making adjustments along the way after your initial offer. I would also highly encourage you to research alternative solutions and even engage other candidates right now in the process so that you can have a better sense of what is available in the market to you and also have an advantaged negotiating position since you’ll know to what extent this person isn’t the only game in town to consider. As I said before, there are several details which may dictate or alter precisely how you approach the offer and negotiation process with this new hire. I'd be happy to hop on a quick call to discuss further so we can dive into detail on 1) how important this particular candidate is to your overall scope so that we may 2) identify the appropriate starting point and end point for negotiation purposes and 3) consider alternatives to this plan as your backup plan in case the conversations with the candidate do not go as anticipated (or inversely, so you can have a clearer understanding of how advantaged or disadvantaged of a negotiating posture you need to take.) Reach out and request an appointment so we can connect and discuss further.

In my experience, every step you take to complicate your company's structure and ownership rights reduces the likelihood of investors providing your venture with seed funding. To attract seed funding, investors expect a single-minded laser focus on the entrepreneurs' assessment of his or her best path to validating their business and growing it into a very large business as quickly as possible. So the very idea that you are reliant or considering taking multiple paths to success is likely to act as a red flag for most experienced early-stage tech investors. Also, until there is significant traction achieved, an investor is expecting to own everything generated by the business. There are rare occasions where a particular asset, brand, domain or other component of the business can be spun-out (usually in the case where it's a distraction from the core business but there's inbound demand from a buyer), but when I say rare, I mean this happens so infrequently that it's not anything that should be reasonably expected in the course of planning. Speaking candidly, this entire strategy creates a perception (accurate or unfair) that you are undecided on a number of the key questions you need to be sure of before you have a good chance of raising seed funding. I'd be happy to talk to you about what you're doing and help provide some clarity based on what I hear. I encourage you to review my references as I have been helpful to many other Clarity members on these types of issues.