Most of my experience is in the realm of physical products, but one workaround that helped was going to universities and hiring students part-time. Because I technically had students in my team, I could sign up for student business competitions to raise equity-free capital. Use that to see where the app goes and like another commenter said, if you’re seeing traction, you will become more appealing to potential investors.
this post was submitted on 21 Nov 2023
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Agree with above comments, maybe reframe the question to what you want to achieve by when, then ask who/how/how much $.
Also consider bringing on a hands on partner for equity vs driving solo with expensive resources.
Considering your focus on retention, have you considered the middle ground of hiring app developer contractors for specific projects? It could be a more budget-friendly option. As for funding, maybe start with a smaller goal, prove the concept, and then aim for the stars. Remember, it's not just about the money raised but how wisely you spend it. Best of luck navigating the startup rollercoaster! PS: try rocketdevs.com for hiring developers for cheap, i got mine from there.
So you have 10% retention and the app generated 500/mo in rev, estimating appx 6000/yr in rev, and you want to spend 250k per person on devs?
Wtf?
No, not for you specifically. Here's what I would do instead:
- Decide if you're building a rocketship for VC's, or a more sustainable slower growth business where angels/customers might invest.
- If there's VC-level potential, create a 5 page pitch deck showing your problem, thesis, goal, and current #'s.
- Get warm intros to VC's, as many as you can. Don't cold email unless they're on one of those the "cold emails please" list.
- Say you plan on raising a round in 6 months or so, and, if they have the time, would love to get their advice on the sorts of growth milestones and KPI's you should be keeping in mind to have the sort of rocket ship growth to a billion dollar company.
- Use the advice and your customer's feedback to pivot, pivot again, and pivot to find the serious traction needed to identify a possible product-market fit.
- With those #'s, find a co-founder using YCombinator or one of the many co-founder tools out there, date around, and then pick one.
- Now, six months or more later, you're ready to start the process of raising. Expect it to take 3-10 months if you haven't done it before, there's a lot of specific sales type skills you need to develop to do it successfully.
Good luck!
Well the first question everyone asks on shark tank is ~ what’s your revenue?
You probably get ~ I’m out you’re not there yet!
What your business is worth and what you could raise is based on your income or a realistic future income. The chance of an app going from $500 in revenue to being able to generate 1 million so a 500k investment has a return is extremely low and you’re not going to find any investors.
You gotta get your revenue up to take on investment unless you know some friends family or fools to invest based on just you. Otherwise debt would be your other option take a loan against your assets if you’re sure you will be able to pay it back and do it and retain all the company.
What your business is worth and what you could raise is based on your income or a realistic future income. The chance of an app going from $500 in revenue to being able to generate 1 million so a 500k investment has a return is extremely low and you’re not going to find any investors.
You gotta get your revenue up to take on investment unless you know some friends family or fools to invest based on just you. Otherwise debt would be your other option take a loan against your assets if you’re sure you will be able to pay it back and do it and retain all the company.
Well the first question everyone asks on shark tank is ~ what’s your revenue?
You probably get ~ I’m out you’re not there yet!
App Developer Hiring Strategy
Funding Requirements
Realistic Fundraising
App Developer Hiring Strategy
Funding Requirements
Realistic Fundraising
$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?
There are about 1,000,000 potential other factors that need to be considered to answer your question. Plus weeks of financial analysis.
There are about 1,000,000 potential other factors that need to be considered to answer your question. Plus weeks of financial analysis.
$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?
Trying to raise money off an idea is screaming scammer vibes lol
I have a team of talented dev guys. We can completely build your project for $1500 in 3months or less and you can pay as low as $300 monthly afterwards, to maintain and scale.
Check us on www.fingletech.com or you can hit me up if interested.