Startup

How Much Money Should I Raise For My Startup?

“How much money should I raise for my startup?” It’s a great question and one I get asked all the time. This is a pretty challenging topic for many entrepreneurs, and there is a lot of good and not so good advice floating around out there. My recent Forbes blog, “Twelve Mistakes To Avoid When Raising VC Dollars,” touched on the topic. This article dives more deeply into the question and variables within it.

I’ll begin with some basic constraints to consider:

"¿Cuánto capital debo aumentar para mi startup?" Es una gran pregunta y una que me hacen todo el tiempo. Este es un tema bastante difícil para muchos empresarios, y existen varios buenos consejos y otros tan buenos divagando por ahí. Mi reciente blog de Forbes, "Doce Errores a evitar el Aumento de dólares de capital de riesgo," tocado el tema. En este artículo se sumerge a lo mas profundo en la cuestión y las variables dentro de ella.

Voy a comenzar con algunas limitaciones básicas a tener en cuenta:

In general, venture capital is very expensive. Young start-up companies raise money before they have created much measurable or meaningful value, removed much of the risk, answered key questions about how big the market really is, defined how much market demand there is, proved if the product even works, or confirmed if the product has a concrete fit in the marketplace. As a result, the capital is priced with a high degree of risk assumed. Given that it is so expensive, you really don’t want to take any more money than you need.

En general, el capital riesgo es bastante caro. Las empresas jóvenes start-up recaudan dinero antes de que se han creado mucho valor medible o significativo, eliminado gran parte del riesgo, respondió a las preguntas clave acerca de cuán grande es el mercado que realmente es, define la cantidad de la demanda del mercado no es, demostrado si el producto funciona incluso, o confirmado si el producto tiene un ajuste concreto en el mercado. Como resultado, la capital tiene un precio con un alto grado de riesgo asumido. Dado que es tan caro, que realmente no desea tomar más dinero del que necesita.

• Coming up short is even worse than raising too much, as it will almost always cost you even more than the original capital.

Fortunately for the entrepreneur, there is actually a pretty formulaic answer. The amount of capital you should raise should be enough to:

1. Fund the milestones you believe necessary to reach a significant inflection point in the value of the business. Achieving these milestones significantly reduces one or more key risks, creates more insight into the potential scale of the business, and demonstrates the execution abilities of the leadership team.

2. Example milestones could include i) shipping commercial product, ii) acquiring a critical mass of customers or users to prove product/market fit and various business model assumptions, or iii) filling out the core leadership team with “A” players.

3. Build buffer for the inevitable mistake or two in either your estimations or execution –usually one to two quarters. More is always nice, but remember this is very expensive capital.

4. Bankroll

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