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Ask HN: Pre-revenue, approached by angel...what to do?
Been working on an app for a year or so (off and on, as best as possible while balancing day job). It's gotten some press here and there and traction (mostly still in the customer development phase--our app is one in which significant bugs would be a problem). Recently, we were approached by an angel investor. We're pre-revenue, however. How does that work with angels? Is that a bad thing? I predict by the summer (June or July) we'll be ramen profitable, but for now that's not the case. We weren't thinking of taking any investment either, but if that would enable my partner and myself to work on this full-time, I'd be all for it. What to do?
- brudgers 16y agoSuppose you're correct and you would be Ramen Profitable by June (4 months). Taking the cash won't make you Ramen profitable today...by the time you quit your jobs and finish the project it could easily be April (2 months). So the question, "Is it worth selling 10% of the company (or whatever it is) to gain two months?" I will add that there is greater risk in quitting your job prior to revenue than there is post revenue because taking the money and quitting is no guarantee that the venture will throw off revenue anyway (risk is times two - since your partner is also running the risks). It's one thing to grow an existing revenue stream, another to try and create one. Sometimes on HN the emphasis on finding investors is so great that it becomes difficult to remember that the exit is where success should be measured and that taking funding means selling a portion of your company to someone with competing interests (i.e. other investments) taking up their time and energy. Good Luck
- guynamedloren 16y agoDo what is best for the company. If time is of the essence (ie - hot sector with lots of potential competition), you probably want to get your app out the door as soon as possible. If this is the case, would it help for one of you to quit your job and develop the app full time while being supported by the other founder + angel investment? Or is it possible that you could both quit your jobs and develop full time? It really depends on your personal situations as well as many other factors. Tough to come up with a concrete answer, but good luck!