Marius is the most influental writer on Quora about Bitcoin, Cryptocurrencies and all things blockchain. https://www.quora.com/topic/Cryptocurrencies/writers https://www.quora.com/topic/Bitcoin/writers After getting into Crypto in 2013, he has since analyzed numerous cryptocurrencies, knows the Top100 cryptocurrencies inside out and knows the differences, advantages and disadvantages between them. You could say, Marius is the most knowledgable consultant about all things blockchain. That's why Marius has been consulting Top100 cryptocurrencies, ICOs and individual traders, to pick the best coins for their portfolio. Previously, Marius has built 30 apps over the past 3 years, which have reached over 1.1 million users altogether. He received his B.S. of Computer Sciene and Business from the University of Sydney and his M.S. of Information Technology/Artificial Intelligence from the University of Sydney.
1. If you are growing by 2,000 users or $1,000 per month.
2. If you have a very high tech idea and are a very good marketer, such as Theranos, Magic Leap, Tesla.
But you should normally start with Angel Funding. VCs aren't suitable for pre-traction startups for a multitude of reasons.
It depends on how many prospective customers you have.
Do you only have 3 high profile customers that you think you can sell to, or are there 100s.
If there are 100s, simply write a few of them and ask them if they want to try out your product for free, since you identified them as "high profile" clients. (don't add the "" of course;))
If there are only 3, polish for another 1-2 months.
Yes, you can use paid ads, Facebook, Google etc., but it won't get you far if you don't have $100k+ funding.
What you need is something that gives you 100,000 users while spending $0. This is the task of a founder, and it's difficult. Possibilities are Guerilla Marketing, PR-Stunt, Partnerships with bigger brands and a lot more. Let me know if you want to find an idea.
It sounds like you don't need money, but you need connections.
VCs are valuable as such, because they can provide intros to Woolworths CEO etc.,which saves you 3 months in your sales cycle.
At your point of traction now, you can get a really good deal for your round, so it is definitely worth it. However, I would also hop over to the U.S., to speak with some investors there, it's definitely worth it.
I'm not sure if you know the Aussie Mafia, but simply search for the Facebook group and make a post there, they will connect you to relevant investors.
After you are growing by 2,000 users a month or by $1,000 revenue a month.
However, you should always be fundraising a little. So, if you are spending 5% of your time before you have reached those KPIs and build relationships with investors and get feedback on the product, that's good.
Yes, you definitely need funding, since the food delivery space is a race to the bottom with heavy players already in the space.
This is bad one the one hand, good on the other, because you can raise money on this if there are a lot of people doing it. That means, there is money in it.
HOWEVER. I would not do it in a country, where a big player is already present, you simply can't win. But, you can do it in a country, where there isn't. Would it be possible for you to make it work in Chile, Austria, Serbia, Romania, Belarus, Lithuania, maybe China, Japan, Korea, Australia, Kenya? Many of those are beautiful countries, with completely untapped markets that are just waiting for a player to grab them. It just takes some time to readjust and move to another country, which most founders aren't willing to.
The most basic calculation for a company is calculated by year revenue *10. Your company would be worth $40,000*12*10=$4.8M. The first round is usually around 20%, so you could raise $1M. This would make sense and investors would find your numbers convincing.
However, there are obviously also other factors at play. For instance, if you have gained your $40k revenue/month within a year or less, you can point to very fast adoption, so your valuation should be $10M. Then, you can argue that you need a lot of money for expansion in the U.S. and you want to go big and beat your competitors (which you hopefully have) to the market, so that you can seize the $8B global market first.
Then you can argue, that within the next 3 years, you anticipate $40M annual revenue, that's why you want to raise $10M at a $80M valuation.
Ok, now forget about all of these numbers. Understand that investors are led by emotion. They don't understand your business or cannot asses your predictions. Investors aren't engineers. They studied MBAs, never built a business before, then started as an Investment Analyst at a VC firm, after 5 years became partner and after another 5 years became limited partner. However, they never built a business and they couldn't for the life of it if you told them to.
So, you can simply tell them your great ambitions and they will be very excited and tell their boss about it. However, don't be cocky, overconfident or delusional, just be normally confident. The investor must think that he is more knowledgeable than you, more confident. Make it their idea (https://uniquedevelopment.com/blog/how-to-persuade-people-to-do-what-you-want-and-think-its-their-idea/).
They will forget about your current $500k revenue and only think about the $40M revenue within 3 years, on which you can raise $10M at a $80M valuation. This is feasible if you raise in the U.S.
However, if you raise in Europe, you can practically half your valuation if you want to raise within 3 months. In Europe, I suggest to raise $5M at a $30M valuation currently even and you should also tone down you ambitions, such that you estimate $20M revenue within 3 year.
I hope this helped.
At this point, you shouldn't focus on fundraising, mostly because will always take 3-4 months or more, except you are fundraising in San Francisco or Boston.
Instead, you should try to get your app featured by Apple, which will give you 100,000 paid downloads in a week, at which point you don't need any stupid investors who are only interested in making money and not buidling a successful product. ;)
This should be possible if you have a good app and if you know what Apple is looking for.