What does it mean when a VC asks you, “what cap are you raising at?”

You are right that the range is wide. You need to figure what are good values to have for your category. Also, you can focus on the trend (is your DAU/MAU increasing vs decreasing after you make changes) even if benchmarking is tough. Unless your app is adding a huge number of users every day (which can skew DAU/MAU), you can trust the ratio as a good indication of how engaged your users are. For games, DAU/MAU of ~20-30% is considered to be pretty good. For social apps, like a messenger app, a successful one would have a DAU/MAU closer to 50%. In general most apps struggle to get to DAU/MAU of 20% or more. Make sure you have the right definition of who is an active user for your app, and get a good sense of what % of users are actually using your app every day. Happy to discuss what is a good benchmark for your specific app depending on what it does.

To answer your questions: 1) Mobile companies at your stage usually raise angel funding at a valuation equivalent of $5,000,000 for US based companies and $4,000,000 to $4,500,000 for Canadian companies. 2) The valuation is a function of how much you raise against that valuation. For instance, selling $50,000 at $5,000,000 means you are selling debt that will convert into shares equal to roughly 1% of your company. 3) I would encourage you to check out my other answers that I've recently written that talk in detail about what to raise and when to raise. Given that you've now launched and your launch is "quiet", most seed investors are going to want to see substantial traction before investing. It's best for you to raise this money on a convertible note instead of actually selling equity, especially if you are intending on raising $50,000 - $100,000. Happy to schedule a call with you to provide more specifics and encourage you to read through the answers I've provided re fundraising advice to early-stage companies as well.

I'm both an active angel investor and entrepreneur who has recently raised capital. I'll start with what is standard in Silicon Valley and then apply various multiples and discounts where relevant. For an angel or early seed round, the current going rate is $3m-$5m pre-money via a capped note or priced round. Priced Rounds typically most often use the "Series Seed" docs and Convertible Notes typically are 18-24 month terms with a 15% discount. I don't mean to be argumentative but Marco is incorrect that valuation can be avoided by a capped note. And in general, there is no way to avoid setting a valuation except via an uncapped note, which is almost unheard of. Setting your cap and discount will have a significant impact on your cap structure, the same (and in some cases) worse than a priced round. This $3m - $5m range is what I'd call current market value in the valley for "ideation-stage" capital. This is that there is a team in place, typically some form of MVP and in some cases some very basic market data supporting the general thesis of the raise. In the other market I'm familiar with (Canada), the range for the same stage of capital is $1m - $3 with most being in between $1m and $2m and most preferring priced rounds over notes. These rounds rarely have a real lead since the raise is typically $500k or less, so if you price it reasonably, most (good) angels will accept the terms as is. The low and high end of the ranges are discounted and pushed by the credibility presented most often by the team (done it before, worked for a notable company, had some relevant success) or strong evidence of the thesis being correct. It's also the Founder's option to price the round at the top end of reasonable or provide what you might consider a discount, depending on the kind of investors you are courting. So while this is what I'm seeing as "current market conditions" there is price elasticity in any market. The best way you know if you've priced it right, is if people are buying. Any angel investor should be able to give you a conditional answer after the first meeting (subject to playing with the product, reading terms, meeting the rest of the team). Any angel investor in ideation stage capital who can't give you a yes, no or subject-to yes in the first meeting is not worth pursuing IMO. Any investor who can't close within 3 meetings or conversations won't close (9 times out of 10). Happy to talk to you about the specifics of where you're at, what might help you improve your odds and generally get you closer to the point where you're ready to raise.

I heard of a startup that recently launched called http://sketchdeck.com that has become pretty popular for fundraising decks. Happy to do a dry run of your pitch with you in a call.

From my experience I would not advise you to go with Venture Capital when you're a start-up as in the end they will most likely end up screwing you. A much better source for funding would be angel investors or friends/family. The question of how much equity should I give away differs for every start-up. I remember with my first company I gave away 30% because I wanted to get it off the ground. This was the best decision I ever made. Don't over valuate your company as having 70% of something is big is a whole lot better than having 100% of something small. You have to decide your companies value based on Assets/I.P(Intellectual Property)/Projections. I assume you have some follow up questions and I would love to help you so if you need any help feel free to call me. Kind Regards, Giuliano