Hi guys I wanted to ask a quick question. I'm currently creating a few software apps which are based on rev share and I own IP of them. I wanted to ask 1. Do you know of any rev share marketing experts for apps? If anyone is interested in rev share partnership for our apps please let me know 2. At what point do you think I should look for funding? Do I need atleast 10,000 users for a social app, and for an app with revenue atleast £20k in revenue proof etc. I'm not sure when I should be seeking funding to really accelerate the growth.
John Doerr, principle at Kleiner Perkins, often says "A true entrepreneur delivers more than expected for less cost than expected". You want to raise money when you understand your market/product well enough that the money funds an assured plan for growth. The plan will have risks and challenges, but you want the money to fund things you have validated in the market place, not supposition.
Specific to social networking in early stage, a market of 1,000 active users is more meaningful than 10k inactive users. It is hard to get a good venture firm to invest if you have less than 20k active users. Growth/user acquisition cost is a key factor in gaining smart investor attention.
The conversation you want to have with the VC is:
"Based on the use patterns of our X,XXX users, we see our network doubling every 60 days and revenue per user growing 30% each month. The funds we are raising allow us to expand this model to 100,000 users, to achieve average revenue of $XX/user/Month growing at 10% CAGR in year 2 and 3."
Answered 10 years ago
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