| "People" are right, if you're talking about angel investors who are professional and subscribe to, say, Valley-or-equivalent norms. Why? 1) Your investors will model $50k as being gone in an eyeblink. In the Valley, that's ~3 engineer-months. Angels will want your round to last about 12~18 months. 2) All entrepreneurs raising their first round are inexperienced in some way, but for better or worse, the combination of not knowing angel investors want rounds to be bigger and not knowing $50k will be gone in an eyeblink shouts Particularly Inexperienced Entrepreneur Here, which counsels against angels believing that your company will be the one out of 10 which > 10Xes their money. Angels absolutely, positively must invest in that company, and it's hard, so they reserve all their shots for companies they think might be that one. 3) You're horrifically mispricing your company relative to market conditions right now [+], which you would think would suggest a savvy investor would think "Hmm deal of the century", but which actually mostly signals "Stay way the heck away" because of the power law of startup returns ("If you make a practice out of getting great deals on good startups, you will lose money; you need to make get good deals on great startups.") There are more fish in the sea that investors, by the way. If you really and truly need only $50k to make this business a success, one might suggest friends-and-family and/or bootstrapping and/or -- and one hesitates to suggest this but one may have used it before -- credit cards. [+] If your company is investable, it is worth > $2 million right now. I'm taking the liberty of assuming you aren't valuing the company at that because no one does a round for < 5%. Your company may or may not actually be investable. If you're curious, you can read on Venture Hacks. Fair warning: what the Valley institutionally considers as investable is, if one takes it as a judgement of one's worth, pretty brutal for most people building tech companies. (It's not -- I've had basically no investable company in my career until maybe the current one -- but many people wrap their self-worth up in what investors would say about their businesses for some reason or another.) |