4 ms·
Isn't it a bit premature to put your cards on the table and specify what kind of money you're looking for?
by ew 14y ago
Isn't it a bit premature to put your cards on the table and specify what kind of money you're looking for?
- rdl 14y agoAbsolutely. The public information should say what the companies are doing, and how far they are (maybe just mention one or two milestones for each; you want to make each look good on its own metric), and maybe whether or not money is being raised, but the exact amount is probably bad, and quoting actual price (pre and post money, etc.), like a few of them do, is a really bad idea. There are reasons not to do lots of explicit price quoting in the US market which wouldn't apply in Chile (US securities laws around a public offering), but there are plain salesmanship reasons to not quote a price before someone is interested. Any serious investor is going to know roughly in the range all of these companies need ($100k to $2mm), and the big rounds are probably going to be made up of multiple investments from independent investors.
- ew 14y agoThat's SUPs biggest problem, they don't know things like this. There was a similar issue a while ago with them announcing who got accepted into the program.
- rdl 14y agoJust like a startup, they're new and have some kind of huge fundamental advantage over everyone else, so they can screw up a lot of details and still do well. Hopefully they'll continue to improve on those things, though.
- hmlt 14y agoLife teach me that is always better be transparent and go upfront, then there is nothing wrong on show how much they want to raise :)
- popo5 14y agoin english please
- rdl 14y agoTrue in some contexts, false in others. When raising money, or selling a product, there's a difference between "transparent" and "honest". You don't lead with the weakest part -- you don't price a product based on how much it costs to make -- you communicate value to the buyer and then figure out a fair price. $500k from someone like hn user pmarca is worth a different amount than $500k from joe smith.
- il 14y agoI'm wondering why so many of them are looking for $200K or less. $200K is more of a friends and family sized round- it's very rarely enough to get a startup to Series A or profitability. It seems like saying you're raising a small amount sends a negative signal that you're not interested in building a big company to investors.
- mtr 14y agoFor startups based outside of North America $200k goes much further than those based within. And correspondingly $200k is harder to raise from friends/family.
- jmelul 14y agoYeah, it is a tricky subject because if you are raising money down here you have to adapt to the local environment. There is definitely not as much money flowing around and the "normal" seed rounds are more in the 100k to 750k range which is a lot less than what it is in the USA. Down here, investors are more risk averse and less "smart" so they are more comfortable with smaller investment steps, especially in the early stages. In addition, like @mtr mentioned, the money goes much further down here. The cost of living is around 4 times cheaper and the cost of hiring developers is getting close to 3 times cheaper and there is a lot less competition for talent. The good thing is that they have the same amazing climate as Cali down in Chile ;) That said, you are definitely right about the signal it sends. I guess the pitch and the fundraising campaign has to be country sensitive in order to be more effective.