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MenuHow much dilution should I expect when raising a super angel round for 700k?
I am a startup founder with 5 customers (50K revenue in 5 months) for a a B2B SAAS product.
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?
Answers
Im an investor and advisor. As many people as you ask, you will get different answers. The best and most successful way to raise capital is to start with people you know, aka friends and family. If friends and family are insufficient as they often are, then you need to find angels. If you dont know anyone, network. They arent hard to find. It might be a good idea to find a few prominent local people to serve as advisors and get their help in raising money. The worst part about raising money is that it almost always deflects from running the business. If you want to discuss this further, Im available.
The first step is to do the valuation based upon the appropriate method of valuation out of 10 methods available. Then a capitalization table shall be prepared for pre-money valuation. The dilution should be appropriately as per the valuation and fund required. Feel free to setup a call with me, I'll make it simple for you. My company can do the valuation and prepare all the required documents for you.
First, it is not always necessary to raise funds; one can always bootstrap. What does an investor look for while funding? Primarily three things: team, the idea and the trump card -- traction. Angel investors in India typically take up 20-30% of equity for investment worth INR 1-3 crores. This is relatively a large chunk of the company, but it is so because hardly one of the 10 companies an angel invests in will give returns and most of the money has to be made via these deals.
You can read more here: https://yourstory.com/2014/03/startup-valuation-equity-dilution
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
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