Q: We received $150k from Friends and Family, and now we’re “on the board” – starting to show up on searches, getting a sale or two a day, and maintaining some growth. We have created a business model that is very scalable and now we’re doing everything we can to grow ourselves. We know that we will most likely need another round of funding – when should we start seeking that? And how much can we expect to get?
A: (Brad): The cliche “there is no time to start like the present” applies. It sounds like you’ve got something that is starting to work nicely on a relatively small amount of money – early stage investors love to see this. The key is to know how much money you really need to get to the next level and to target the right investors for this. See some of our posts in the Fundraising category for more context on this.
The amount you can expect to get isn’t the right question to ask. You should determine how much you need to get to the next level and then go try to raise that amount. “The next level” is subjective and should be defined by you – what do you think your next major “value creation” point is? This should be linked to you business and financial plan and will be an important part of qualifying prospective investors (e.g. if you need $2m, you will likely be pitching different folks than if you need $20m.)