Seed Funding we have an MVP, several hundred paid users, two notable healthcare pilot partnerships and a small payer pilot for our mhealth behavior change platform as we graduate from a health accelerator. We can access 20k from the accelerator for 4% of the business in august, but we were considering a small seed raise of 50k as a convertible debt note ( android development/marketing/some travel for key enterprise thought leadership opportunities) Is there a downside to raising a convertible debt note for us?
No downside, as long as whatever money you raise gets you to the conclusion of an important business experiment. For example, if the $50k gets you to the point where you can demonstrate a growing revenue stream, then it's probably a good idea. If not, then you should evaluate what financing you need in order to prove traction in the market, then raise that much. Since you already have some paying customers, people will ask questions about the "quality" of that revenue. Will it recur? Is it representative of the customer base you intend to sell into? Are there enough of them and enough revenue in order to prove that your unit economics are good? Sorry that this answer has more questions in it, but that's how it goes.
Answered 10 years ago
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