How much dilution should I expect when raising a super angel round for 700k?

Avoid buzzwords: - every founder thinks their idea is disruptive/revolutionary - every founder says their financial projections are conservative Instead: - explain your validation & customer traction - explain the assumptions underlying your projections Avoid: - focusing extensively on the product/technology rather than on the business - misunderstanding the purpose of financial projections; they exist in a pitch deck to: a) validate the founders understanding of running a business b) provide a sense of magnitude of the opportunity versus the amount of capital requested c) confirm the go-to-market strategy (nothing undermines a pitch faster than financial projections disconnected from the declared go-to-market approach) d) generally discredit you as someone who understands how to build a company; for instance we'll capture 10% of our market, 1% of China, etc. Top down financial projections get big laughs from investors after you leave the room. bonus) don't show 90% profit margins. Ever. Even if you'll actually have them. Ever. Instead: - avoid false precision by rounding all projections to nearest thousands ($000) - include # units / # subscribers / # customers above revenue line; this goes hand-in-hand with building a bottom up revenue model and implicitly reveals assumptions. Investors will determine if you are realistic, conservative, or out of your mind based largely on the customer acquisition numbers and your explanation of how they will be achieved. - highlight your assumptions & milestones on first customers, cash flow break even, and other customer acquisition and expense metrics that are relevant Avoid: - thinking about investor money as your money - approaching the pitch from your mindset (I need money); investors have to be skeptics, so understand their perspective. - bad investors; it's tempting to think that any money is good money. You can't get an investor to leave once they are in without Herculean efforts and costs (and if you're asking for money, you can't afford it). If you're not on the same page with an investor on how to run/grow the business, you'll regret every waking hour. Instead: - it's their money; tell them how you are going to utilize their money to make them more money - you're a founder, a true believer. Your mantra should be "de-risk, de-risk, de-risk". Perception of risk is the #1 reason an investor says no. Many are legitimate, but often enough it's simply a perception that could have been addressed. - beyond the pitch, make the conversation 2-way. Ask questions of the investor (you might learn awesome things or uncover problems) and talk to at least two other founders they invested in more than 6 months ago.

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.

Wow, lots of questions here. Let me try to hit them in order: "Should I get a job or find investors?" IF you have access to enough investor capital (not debt and not your savings) and you can get to MVP and still maintain ownership of a sizable majority of the business then do it. IF that means debt financing then only use the debt lines the cost of which can be carried by returns generated by the use of funds. I would prefer to offer a convertible note to prospective investors that can be easily extended throughout both friends and family and seed rounds (up to $2M to $3M) to get to proof in the market. If you can get to revenue and earnings fast enough then you can avoid equity dilution all together. IF you cannot secure that find of funding AND you cannot produce enough revenue from your business to deliver sufficient earnings for you to live on, then by all means, you should find a way to make the money you need and not burn all your savings or mortgage your home If that means short term contract work that's great. Particularly if you can find log term work that is relevant to the business you're building. If that means taking a job then do that. IF you do that, then yes, be transparent with your employer and let them know you're working on your own business also. Hope this helps....

As Ken suggested, there is a wide breadth of mobile offerings and although there are some great "mobile only" funds, each investor / fund has their own thesis that makes them interested in some but disinterested in others. Also, if your revenue generating, you should seriously consider bootstrapping further. Revenue is treated very strangely in early-stage investing and *might* work against you. AngelList is a great way to research investors but not effective in actually connecting with them. Find investors who you are confident will be passionate about what you're doing based on prior job experience or what you know they are investing in. Happy to talk in a call to help explain this further if you need more clarity.

A prototype will not get you an investor, to be honest. This is just a fallacy. If you can fund the prototype, launch it in the market, get some traction from users. See if your mobile app resonates with your users. You need to track whether your app is able to retain those users so that they keep coming back to it. If you have a good amount of retention with the first few set of users (100 or 1,000), that's a good pitch to take to an investor. Investors are not looking at ideas, they're looking at businesses that can get, retain and engage a customer.