So many of you have asked me this question.
Short answer:
> You should raise enough to hit the milestones to raise your next round of funding.
Step-by-step guideline:
Identify the specific milestones that you must hit to prove that your company is moving in the right direction
Milestones need to be based on facts and in-depth research (especially regarding competitor analysis)
Center your pitch around those laser-like focus metrics and zero in on how the funding will help in improving them
Make sure your milestones are SMART - specific, measurable, achievable, relevant and time-bound
Invite the entire team to discuss and figure out what needs to be done to hit those milestones
Remember that people are optimistic, even when they are asked to be realistic, hence it might be worth considering adding 30%-50% to the asking budget
Be realistic in your ask because if you need to raise money to make it to your next funding milestones you are left with no power in the negotiations
Get that final number in your “ask and use of funds” slide
This method was described in a TechCrunch article.
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