From $100k to $1 Million: Funding Equals Push for an Exit

Do Serial Entrepreneurs Have an Advantage in Financing a Concept Stage Venture?

Thought Leaders in Financial Technology: Snehal Fulzele, CEO of Cloud Lending (Part 3)

Sramana Mitra: One thing that I find curious is that you have 85 customers and they are all online lenders. How many online lenders are there right now?

Snehal Fulzele: We are a global company. Half of our customers are in the US. It started in the UK and US, and we are seeing a lot of online lending in countries like China. There are about 3,000 companies in China. It’s happening in Australia. If you add the crowdfunding platforms in the US alone, there are about 400 of them, which spans across not only loans, but also equity platforms as well.

Sramana Mitra: You don’t just deal with lending. You also deal with equity crowdfunding due diligence? >>>

Thought Leaders in Financial Technology: Snehal Fulzele, CEO of Cloud Lending (Part 1)

You’ve read our coverage of online lending vendors like Kabbage, OnDeck, Lending Club, etc. Here, we cover a story of how ALL online lending vendors (including banks) will soon become much more customer-centric, equipped with technology for fast decision-making and rapid processing of loan applications. Important trends in the industry. >>>

From $100k to $1 Million: How to Minimize Equity Dilution by Using Convertible Notes

I have always advised companies in the 1M/1M eco-system to avoid raising equity financing too soon. In fact, as a thumb rule, we advise entrepreneurs to get to enough validation such that they can get to at least a $2M pre-money valuation.

Now, if you’ve managed to get to $100k in revenue with a consistent set of customers, it is likely that you can get to the $2M minimum valuation threshold. If not, and if you must raise money, you should look at doing so on convertible notes.

In fact, during one of our recent roundtables, we had as our guest Venky Balasubramanian, co-founder of Plivo. Venky and his partner have achieved the amazing feat of growing a relatively fast growth business to well over $10 million in revenue with just $2M in angel financing.
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From $100k to $1 Million: How to Minimize Ownership Dilution

If you have managed to get past $100k in revenue, that tells me that you have some sense of who your customers are, why they are buying what you have to offer, and how to sell to this customer base.

This may also be a time when you are starting to consider your first funding round.

I want to tell you a story.

Christian Chabot, the founder CEO of Tableau is from Milwaukee, Wisconsin. He arrived in Silicon Valley to study at Stanford, and got inspired to become an entrepreneur by Irv Grousbeck. Soon after graduating from business school in 2000, Christian founded BeeLine Software that came up with a better way of doing digital mapping. The company only had 3 people, and was sold in 18 months to Vicinity, offering the founders some early cash.
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How Did Mark Zuckerberg Retain 26% Of Equity In Facebook After Raising So Much Money?

In general, my observation is that entrepreneurs retain a much higher percentage of equity if they can bootstrap their way to showing real traction, and then keep delivering solid performance metrics.

Obviously, Facebook was in high gear when Peter Thiel invested the first outside money into the company, so seed financing was not some $25k for 10% equity from an incubator. Rather, it was $500k for $10%. This started things off well, the cap table had lots of room for raising new rounds without ridiculous amounts of dilution.

Prior to the Peter Thiel investment, there was a small amount of friends and family money in the company, and by the time the first outside round took place, the company had started generating ad revenues. The valuation for this round was $5M in September 2004.
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INDEX: Funding High Impact New Ventures

By Guest Author Soren Petersen

High-impact Design Driven Startups are investors’ darlings and the INDEX: Award is taking advantage of this by applying their unique design award evaluation process to vetting candidates for venture capital funding. The organization’s newly launched Danish Ventures – Investing in Design to Improve Life foundation is the next step in securing that high-impact, contextual and superior fashioned offerings are actualized. >>>