I'm starting a company that should have 10k users. It's location based so I need money to expand and increase users. How much MVP and users do I need for funding?
Good question.
It's not only about how many users you have, it also (and sometimes even more importantly) about:
1. What the conversion rate is (visitor to user or click to paying customer, etc...).
2. What your user life cycle is.
3. How engaged the users are.
4. What your profit % is from each user.
5. What industry you're in.
and a few other metrics. Sometimes, if these metrics are good, it less matters that you "only" have X users.
Good luck
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I believe that seed funding rounds are not solely determined by the by number of users alone, there are several factors included in it alongside the users.
If the founders are asking for $4 million and he needs a 25% ownership stake to rationalize the investment, then everyone agrees that, on paper, the company is worth $16 million. That’s been the experience of Peter Pham, cofounder of Science, an incubator in Santa Monica, California behind Dollar Shave Club and Bird, among others.
You can read more here: https://www.svb.com/blogs/silicon-valley-bank/determining-seed-startup-valuation
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
The number of users required to raise a million dollars in a seed or seed plus funding round can vary widely depending on the type of business and the specific circumstances of the fundraising. However, generally speaking, investors will be looking for evidence of market traction and a viable business model, and the number of users can be one indicator of this.
In some cases, startups with only a few thousand users have been able to raise significant funding, while others with hundreds of thousands or even millions of users may struggle to secure funding if they cannot demonstrate other key metrics such as revenue growth or customer engagement.
Ultimately, the key to raising a million dollars in a seed or seed plus funding round is to build a compelling business case, including a clear value proposition, a viable business model, and evidence of market traction. This may involve demonstrating a strong user base, but other factors such as revenue growth, customer retention, and team expertise may also be critical in attracting investor interest.
