4 ms·

I may have a few answers here. Or at least datapoints. Context: in Europe, right now shopping around for a preseed. Realistic target at 500k-1M range but could

by di4na 5y ago

I may have a few answers here. Or at least datapoints. Context: in Europe, right now shopping around for a preseed. Realistic target at 500k-1M range but could go higher. We have a bootstrapped MVP but no client yet. B2B, devops kind of tool. 1. Rn with the current market, 500k pay for a team of 4 for a year. Nothing else. That is the reality of market price for tech jobs. In a B2B environment that will limit your sales heavily but let you polish the product and onboard some users. Reaching for less make no sense. You would pay under market rate for only 3 to 6 months. Noone will accept that offer. 2. The cost of bootstrapping are really low. If you get offers smaller than that, better not take in investment and grow at the pace you would have had anyway. 3. I totally agree that Round A and bigger are totally out of whack. In the current environment making money, at least b2b, should be easy. 4. The problem here is that... most of the current tech is not trying to be a giant. As you said. And we have a lack of financial products for that. So you have to keep in mind that the VC landscape is quite separated from what they fund. We have mostly products that will be profitable but not products that will become giants. And VC still finance late rounds as if they were. 5. Also there is a looot of money available in late rounds. LP give a looot to these, from institutional org. So you get a natural inflation. Which mean you do not finance on fundamentals. You finance on being able to interest these big funds in later rounds 6. To raise a pre-seed or seed right now means i would need to work for 3 months full time pitching. People with a working product can't do that. So you get the "grifters" So yeah. All in all we are losing a funding system for products with the kind of fundamentals you talk about. Cost of starting have reduced... so bootstrapping them and ignoring the VC landscape is easier. Sadly. There is some hope for new financial products but not high here. Edit PS: if you want to invest or more info, feel free to contact me. Email in profile will work.

AndrewKemendo 5y ago
Cost of starting have reduced... so bootstrapping them and ignoring the VC landscape is easier. Right, but people aren't just going out and executing and scaling without funding - which is what they should be doing. Instead they want VC to fund their experiments, which IMO is bad for the market.
- di4na 5y ago
  Well tbh we would love to have a less costly capital that would be more interested in profits than in dumb growth. But it does not exist. Also it is not about scaling. It is about security and good bets. I can be paid 150k to 200k for a FTE job. Why take the risk and reduce my income by bootstrapping. Investor money allows that to happen. I sell an option on future gain for today cash. Basic investment. The fact that noone wants it tells us the problem is a lack of a financial product.

by di4na 5y ago

AndrewKemendo 5y ago

Cost of starting have reduced... so bootstrapping them and ignoring the VC landscape is easier. Right, but people aren't just going out and executing and scaling without funding - which is what they should be doing. Instead they want VC to fund their experiments, which IMO is bad for the market.

di4na 5y ago
Well tbh we would love to have a less costly capital that would be more interested in profits than in dumb growth. But it does not exist. Also it is not about scaling. It is about security and good bets. I can be paid 150k to 200k for a FTE job. Why take the risk and reduce my income by bootstrapping. Investor money allows that to happen. I sell an option on future gain for today cash. Basic investment. The fact that noone wants it tells us the problem is a lack of a financial product.