Questions

Hey guys, We're building a community for startups and entrepreneurs (http://teamstoryapp.com) iOS is currently live with invite-only: https://itunes.apple.com/gb/app/teamstory/id834137499?mt=8 and Android is in development right now (launching in summer) We have angel investors reaching out to us and asking about the valuation & pre-seed investments. We are just wondering how much we should raise in this case... 1. What are some valuation range for a startup / product like this? 2. How much of our valuation should we give to the investors (we're talking about a small investment like 50K) 3. Should we get investments at all for now? Right now we're silent launch with 300 iOS users and 1000 on waiting list on both android and iOS. Thanks

To answer your questions:
1) Mobile companies at your stage usually raise angel funding at a valuation equivalent of $5,000,000 for US based companies and $4,000,000 to $4,500,000 for Canadian companies.
2) The valuation is a function of how much you raise against that valuation. For instance, selling $50,000 at $5,000,000 means you are selling debt that will convert into shares equal to roughly 1% of your company.
3) I would encourage you to check out my other answers that I've recently written that talk in detail about what to raise and when to raise. Given that you've now launched and your launch is "quiet", most seed investors are going to want to see substantial traction before investing.

It's best for you to raise this money on a convertible note instead of actually selling equity, especially if you are intending on raising $50,000 - $100,000.

Happy to schedule a call with you to provide more specifics and encourage you to read through the answers I've provided re fundraising advice to early-stage companies as well.


Answered 6 years ago

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