

What is the Right Amount of Money to Raise at a Startup? - rpledge
http://www.bothsidesofthetable.com/2010/03/11/what-is-the-right-amount-of-money-to-raise-at-a-startup/

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holdenc
As a die-hard boot-strapper I am bothered by those who think seed capital is
big a component of a technology business. If you can afford your hosting bill
and can build the app what else is there? If you need help paying for hosting
then your business is going well enough that you should really think hard
about taking money for equity.

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aditya
build it and they will come?

\- you do need money to advertise, unless your app is really viral, and a lot
of apps aren't.

\- you need money to pay people that have skills that you do not, such as
design, or tech, or marketing.

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tptacek
Patrick McKenzie advertises his business and hasn't taken a dime from an
outside investor.

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aditya
Great, let's use anecdotal evidence.

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count
How about for startups that are not building the typical web app? What if you
do need capital for manufacturing and prototyping and regulatory approval?

What's a decent 'runway' for that kind of deal? I can't see pushing our
product out within 3 years, due to the above, and it will definitely take
substantial capital investment.

Is taking as much as possible such a bad thing in that case?

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anamax
> Is taking as much as possible such a bad thing in that case?

Yes.

The right amount is "the minimum that will let you achieve your goals". That
amount depends on the biz and goals but it is never "as much as possible".

In other words, the fact that certain biz require $1M to get to viability
while others can get there with $10 does not imply that the former should take
$100M.

Too much money, like too little money, causes problems. Does your startup need
more problems?

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ulrich
Too much money in very early stages is definitly a problem. I am experiencing
this at my current job. The company grows very fast and you soon have a lot of
people with a lot of different ideas. Problems are solved by getting more
employees.

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johnm
Less than you want and more than you think.

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pw0ncakes
Wildly variable. For biotech, a common deal is to raise $40+ million in
exchange for 95% equity. This leaves the founders with 5%. On the other hand,
5% of a $40M company, with huge growth potential, is still substantial.

On the other hand, web apps often don't need VC until late in the game.

