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by gwillis13
5193 days ago
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First off, congratulations on being funded, but a number of red flags popped into my head when I was reading your information, and the number you received for funding. 1. Did you have positive sales/user traction?
2. Is your product B2B?
3. Do you feel there are a number of products like yours already in the market that isn't big?
4. Was there a true need to involve investors that you couldn't make up in sales? In my honest opinion, I think you gave away too much equity.
45% is a lot for only 100K, and with ideals for growth in mind as well. That means you increase your revenue exponentially to offset the need for additional funding in the future, or hope for the next round of investing that investors only want a small chunk. Slightly doubtful once they look at how much you initially gave up. |
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1. The money we've made so far is through affiliate links, because at this point we offer our product for free. We'll have a freemium service later on once we develop our premium features. The money we've made in one month so far is quite negligible, but it shows that we have potential to make a lot more once we get more customers.
2. Our product is not B2B. We're focusing on users in the higher education market.
3. Our product is not unique, but we've executed very well and offer a much better user experience than our big competitors. We are also trying to appeal to a different demographic than our competitors.
4. Unfortunately, yes. The money we've made so far is too low to pay for anything and it really just showed us that we CAN make money from this. We need the investment mostly to spend on marketing and scalability, and my co-founder would have rather not taken out a second mortgage.