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I'm raising money for my company - we are telling investors that we are raising anywhere from $100,000 - $10,000,000 to give them a choice. We can do a lot with $100k and a lot more with $10M. Its a great business - we will make a lot of money, but I'm not getting the investors interested.
Right off the bat, a range of $100k - $10M is WAY too big. It's a completely different league of investor. It's like putting a T-ball stand in front of Jose Canseco.
If you can make money with $100,000 then you don’t need $10M!!
I hear investors say that all the time, If you can do it with half, then ask for half.
Basically when you are raising capital, you are selling part of your company to Investors. You have to make that an appealing offer. Imaging putting a $30,000 for sale sticker on a classic car BEFORE its been restored. Well it has a lot of potential, but its been sitting in your driveway for 12 years. It has no front seats, the engine needs work, the interior is incomplete.
Well that’s how an investor sees your company: There is no revenue, the management team needs work, and the product is incomplete. So what price tag are you putting on this? What valuation are you setting it at?
Now you don’t want to sell yourself short, but be realistic. Position your company where it should be, take the money you can get and grow your business. Most importantly, learn who you are pitching to - If the Investor looks at $10,000,000 software deals, dont waste his or your time pitching him your $100,000 retail deal!
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