Prepare yourself for Funding

So you have your Team all lined up, got incorporated and have a working alpha and preparing up for Beta realease and get some early customers to prove your product actually works.
Now you’re thinking about getting some funding to take your product the next stage, expand the Developer team, Pay the working co-founder a basic salary and mass market your idea and create the buzz.
How would you build your business plan? would you rather ask for funding that will be enough for an operation of 2 years (If this is the time for you to start being profitable or a potential acquisition).
Are VCs going to fund your project under the assumption there will be no more series and they will likely end up with one round of fund? (I’ve heard horror stories about VCs pushing startup to get lot of money at seris A to later in Serie B, lead another round at a low valuation and diluate the founders).
I would really like to understand and get some tips how you lay out everything before going to a VC or an Angel.

Thanks.

About Adam Benayoun
Adam Benayoun is a serial entrepreneur. CEO and founder at Lionite, he currently develops Octabox, which provides a Web platform combined with a professional social network for small businesses and freelancers. If you'd like to share your past experiences and discuss, you can contact him at adam [at] octabox dot com, Check out his profile at Facebook or LinkedIn.

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Christina Wodtke
(42 points)
June 29, 04:06 pm

Me too—maybe share some stories as well. For example, I was just told in no uncertain terms by one potential investor two years of funding was way too much to ask for. Yet I’ve also been told that you don’t want to live on the road raising money all the time. Advice is often conflicting.

Adam Benayoun
(114 points)
June 29, 05:06 pm

I’ve heard the same, while people said that it is always good to have enough money to at least 2 years of operation, I have the feeling this is way too much to ask.

I would be really happy to hear what the VC in the industry have to say, maybe some VC could comment or write an article about it?

Aydin Mirzaee
(10 points)
June 30, 01:06 pm

keep in mind that this question heavily depends on geographic location (i.e the valley, or somewhere in middle America)... Believe it or not, there are a lot of cultural and legacy aspects associated with how VCs/Angels invest…

other than that, timing is also a big thing… right now, we’re said to be in the midst of the second internet boom… there has been a significant rise in investment in the valley as a result…

Aydin.

Adam Benayoun
(114 points)
June 30, 01:06 pm

Im looking for some input from VC who are outside the valley.

Sanchit Bhatnagar
(1 point)
July 20, 12:07 pm

Thanks adam for asking this question. I’d like to know the answer to this too (maybe with a bonus tip for people who are outside US).

Amie Gillingham
(6 points)
July 27, 12:07 pm

I’d love to know, too. We’re outside the valley, and we’d like to grow, but we’d also love to hear what it takes for a small company like ours to take that leap from a bootstrapped mom & pop to the next level via funding.

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