| Only take VC money if you want to create a large company and sell it in a 5-7 time frame. Or go out of business trying... The main reason you should raise seed money is because (a) you need it to build the product and (b) you are worried someone else could take your market and need to move faster. Otherwise, build the business (as opposed to the product) and then raise 7-10M to expand it. A common pattern is that you give up 20% of the company and a board seat then spend through the Seed round much quicker than planned with revenue lagging expectations. Then either fail to raise the A (happens most of the time) or have to give up another 20% and control of the company. The control issue might be subtle too -- one board seat for the seed, one board seat for the A, two for the founding team BUT the money brings in a new CEO who has the 5th vote. The board actually controls the company (even it you own a majority of the stock) and the CEO will side with the money when it matters. I would prove your economic model (will your current users actually pay for it?) before taking any money. In fact, probably the first thing to do is just ask them (see https://blog.asmartbear.com/vetting-startup-ideas.html). ... My experience was that we raised $700K because we needed to cover the business guy's salary based on a trial by a single large enterprise client and couldn't get anyone else to adopt. The investors were great but it would have been better for all parties if we'd done something else with our time and their money. My final bit of advice is put your revenue and growth expectations in a spreadsheet and game out the no-money vs with-money scenarios. Then increase your expense numbers by 20% and cut your revenue growth curve in 1/2. |