Right. It's a fancy payday loan. It's cash you owe to other people, often with real fun participating-preferred shares making sure they get theirs before you get yours, and as you get yours.
DO NOT SPEND THAT CASH ON FINE WINE or fancy office decor or other nonproductive stuff.
Making the news for closing a round is (I'm told: I never won the lottery) like making the news for winning the lottery: you'll suddenly have lots of new best friends hoping for some of the money. The difference is, if you give away your lottery winnings, you don't have to also pay them back tenfold to the lottery commission.
Getting a payday loan is nothing to brag about. Getting a round of financing isn't either. It's just a way to fuel your business. Be careful out there.
A 'raise' is a huge signal that the company has operated successfully in at least some areas, and some 'intelligent people who should know better' are making a 'big risky bet' on the outcome.
That someone is willing to put $X in likely an entirely unprofitable company is a very strong indicator that they are doing something right.
Think of it this way: if 95% pitches don't get funding, it means that funding is roughly a sign the company is in the top 5% of companies at that stage.
A round A raise means they are the best of those who got seed and didn't get to round A. A seed is for those who made it past Angel, because so many don't.
And - 'money is not just money'. Money is the essential fuel, without which it's nary impossible to build a company.
There are tons of unfunded companies that would be able to be considerably more successfull were they to have 'more money' - but they just don't fit some investors criteria, or they don't have the right fundraising skills.
Right. It's a fancy payday loan. It's cash you owe to other people, often with real fun participating-preferred shares making sure they get theirs before you get yours, and as you get yours.
DO NOT SPEND THAT CASH ON FINE WINE or fancy office decor or other nonproductive stuff.
Making the news for closing a round is (I'm told: I never won the lottery) like making the news for winning the lottery: you'll suddenly have lots of new best friends hoping for some of the money. The difference is, if you give away your lottery winnings, you don't have to also pay them back tenfold to the lottery commission.
Getting a payday loan is nothing to brag about. Getting a round of financing isn't either. It's just a way to fuel your business. Be careful out there.