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Seed rounds/family and friends rounds
Posted on 4/18/18 at 8:55 am
Posted on 4/18/18 at 8:55 am
Let’s say you know a guy who has a promising app, that is being picked up by 2 major companies. The seed round is occurring in June and you are being offered half price shares in friends and family round.
The app has promise and the investment being asked is not crazy 10k-25k.
All the analytics are there for success but you hesistate because you hate mixing business and family.
What’s money talk say about things like this?
ETA: can’t discuss app content due to non disclosure.
The app has promise and the investment being asked is not crazy 10k-25k.
All the analytics are there for success but you hesistate because you hate mixing business and family.
What’s money talk say about things like this?
ETA: can’t discuss app content due to non disclosure.
This post was edited on 4/18/18 at 8:57 am
Posted on 4/18/18 at 11:50 am to L S Usetheforce
If you lose your investment, just don’t be mad and your family member. If you can afford to place the money there and lose it and not materially affect yourself I’d do it. If you will agonize over its performance then it’s probanlu a bad idea.
It’s always risky in early ventures but you are also getting in at 50% price already.
It’s always risky in early ventures but you are also getting in at 50% price already.
Posted on 4/18/18 at 2:33 pm to L S Usetheforce
Having been around startups pretty heavily and plenty of failed ones, there are only a couple of things that matter.
Revenue or Users. If they have that, I’d throw in Founders. Don’t pay any attention to BOD, Advisors, Influencers. That’s all bullshite. If they don’t have users, tread lightly. If they don’t have revenue, tread even more lightly. If they have neither of those things and hey asked you to sign an NDA already, run away immediately.
The startup app world is hyper inflated with a bunch of fake entrepreneurs raising money around ideas. Trust me, I was one of them.
Also, what does being “picked up” by two large companies mean? Are these revenue generating contracts or case studies? If it’s the later, the two large companies are probably just trying to figure out what they can take from the tech to build it themselves. That means little without $$$’s.
Revenue or Users. If they have that, I’d throw in Founders. Don’t pay any attention to BOD, Advisors, Influencers. That’s all bullshite. If they don’t have users, tread lightly. If they don’t have revenue, tread even more lightly. If they have neither of those things and hey asked you to sign an NDA already, run away immediately.
The startup app world is hyper inflated with a bunch of fake entrepreneurs raising money around ideas. Trust me, I was one of them.
Also, what does being “picked up” by two large companies mean? Are these revenue generating contracts or case studies? If it’s the later, the two large companies are probably just trying to figure out what they can take from the tech to build it themselves. That means little without $$$’s.
This post was edited on 4/18/18 at 2:37 pm
Posted on 4/18/18 at 2:33 pm to L S Usetheforce
Remove all family sentiment from the equation. From that perspective, this is simply an investment. If you can stomach the possibility of losing the money, then YOLO. You might as well give it a shot.
Posted on 4/18/18 at 2:38 pm to LSUShock
Two companies: one is a mega name(Tesla).....as in a revenue generator. The red flag is that besides this name they only have 6 other companies and they are not an app that can be utilized to make money by individual users; its tailored to employers.
This post was edited on 4/18/18 at 2:42 pm
Posted on 4/18/18 at 2:46 pm to L S Usetheforce
If Tesla is actually a paying customer generating revenue for the business, than that checks box #1. Which leads to the second box, founders. Obviously someone in the startup had the chops to go sell the Tesla account. That would intrigue a lot of people. There’s certainly more to it, but I would think a founder who could sell to Tesla could sell to others as well.
If they really know their stuff, they will be able to explain exactly why they are raising to you. It’s pretty easy to weed out who’s actually doing something and who’s just talking/hoping for it when you peel the onion. Make sure they know their #s in and out.
If they really know their stuff, they will be able to explain exactly why they are raising to you. It’s pretty easy to weed out who’s actually doing something and who’s just talking/hoping for it when you peel the onion. Make sure they know their #s in and out.
Posted on 4/18/18 at 3:31 pm to LSUShock
I trust the founder...he is the family.....but I feel I'm blinded by my loyalty and love to him. He knows his stuff. He has worked for spacex which in turn ties the Tesla sell so he had an in but that may catch the attention of the ventures in the seed round.
There has been good dialogue here....I appreciate the perspectives.
There has been good dialogue here....I appreciate the perspectives.
This post was edited on 4/18/18 at 3:33 pm
Posted on 4/18/18 at 5:47 pm to L S Usetheforce
How much equity do you get for 10k?
What is the long play for the majority owners?
Are they trying to build up a ton of value and sell out for millions? They could do that without the little investors making a penny.
Or build a long term stable company paying dividends?
I wouldn’t do it. I hate the whole app thing. It doesn’t sound like something I would use, and so for that reason I’m out.
What is the long play for the majority owners?
Are they trying to build up a ton of value and sell out for millions? They could do that without the little investors making a penny.
Or build a long term stable company paying dividends?
I wouldn’t do it. I hate the whole app thing. It doesn’t sound like something I would use, and so for that reason I’m out.
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