Entrepreneur

0 readers

1 users here now

Rules

No Personal Attacks - criticism of ideas is allowed, attacking people is not.
Self Posts Only - links can only provide supplementary material. Your post must contain enough content to have a discussion.
No “How To Get Rich Quick” posts - This community is not about making a quick buck. Posts asking the community how to make $X, without making specific reference to a reasonable idea, are not tolerated.
Avoid unprofessional communication - Please treat fellow entrepreneurs like respected coworkers, label conversations if NSFW and avoid deliberate provocations.

Please feel free to provide evidence-based best practices, share a micro-victory, discuss strategy and concepts with a frame work, ask for feedback, and create professional conversation. Treat every post as if you're at work and representing the best version of yourself.

founded 1 year ago

MODERATORS

communick@indiehackers.space

Is it worth it to raise money right now? (alien.top)

submitted 11 months ago by LavonnaTeti@alien.top to c/entrepreneur@indiehackers.space

17 comments fedilink hide all child comments

I am a single founder working on a consumer mobile app for the past 2.5 years. Primarily working on the apps retention rate to try to get some semblance of product market fit. Then when I do, going to focus on growing revenue. I have been working basically full-time on this app since my main job doesn't take up much of my time.

I've held off on raising money so far, partly because I see no point in raising money unless I can hire at least 2 app developers which I estimate to require at least $500,000 in funding to do so. I don't believe I can raise this amount. (Correct me if I'm wrong, I've never raised money before)

If I can only raise enough money to pay myself + expenses (<$120,000 in funding) then I might as well stay at my main job and continue working full time.

However, I've recently been asking myself a few questions.

Can I just hire app developer contractors instead of app developer employees for cheaper to reduce how much I need to raise?

How much do I need to raise to hire at least 2 app developer contractors?

How much can I realistically raise for my business?

If I could hire only one app developer contractor/employee would that be worth it to raise money and quit my job?

Hoping you guys could guide me in my situation. :)

My Apps 6 Month Retention - 10%
My Apps Monthly Revenue - $500 (Have not focused on this as much as retention)

TL;DR - Single founder, working on mobile app for 2.5 years. Only want to raise money if I can hire a few app developers. Not sure I can raise minimum amount I need to hire a few app developers.

you are viewing a single comment's thread
view the rest of the comments

[–] founderscurve@alien.top 1 points 11 months ago

$500MRR is too low. retention of 10% = 90% of ppl leave within 6mths.

look at customer LTV.

better not fundraise right now. if you need to raise 500k... what % of equity would be give? since that dictates valuation.

so lets say you give 20% (which is a f*ck of a lot) - you'd be suggesting your business is valued at $2.5mil

given $500 MRR = $6000ARR

so thats a multiple of 416x

just for context, a typical multiple for a margin business is closer to 5x, startups can go to around 20x

have you considered part time or agency devs to keep that cost down?