[ryanglasgow]

This is akin to a new hire getting excited about a compensation package of salary + 100,000 shares. 100,000 shares, out of how many outstanding? 1 million shares? 10 billion shares? He raised $1.1M, but at what valuation? After reading the article, I was left wondering if the valuation was low. The team has not proven that they have reached product/market fit or found a scalable marketing channel which makes this a risky bet for investors.

[mattty]

Most likely a convertible note - the investment is taken as debt that converts into equity when the venture raises a priced round (viz. a series A). Neither party has to value the venture at the seed stage, which is usually for the best as it's too early to tell.

Congrats John!

[johns]

I can't discuss the terms obviously. All I can say is that we felt they were very fair.

[seldo]

I mean, you can. You are CEO, and there is AFAIK no legal restriction on you releasing details of your funding. It's just not in your interest to do so.

[ryanglasgow]

I didn't expect you to discuss the terms, but the amount raised doesn't really mean anything given there's no context.

[dcraw]

It doesn't mean nothing. There's a range of equity that will be given away during any round. I don't know how high the variance is but it's probably less than 30% and more than 10%.

[madaxe]

How a company with no revenue or product can have a "low" valuation that results in a $1M+ investment is beyond me. Any value beyond $0 is hyperbolic. No revenue, no product, no proof, no value.

Yes, you can have potential value, which is of course what seed round investors invest in, but I find it astounding that there are seeds for technical products that reach even this size. You can produce a prototype for $100k. When it's time to market it, Series A.

I'd love to be happy for you but as someone who's spent a decade building a profitable business and SaaS that's still apparently worth nothing because we make money I can't accept that a $1m+ investment at seed round is a "low valuation". It's not. It's a very generous valuation. Until you have paying customers, your value is $0.

Please don't get me wrong - not trying to denigrate what you guys are doing, or to piss on your parade, but I just find the entire idea that people would say this is a low valuation mind-boggling.