Why We're Not Raising Funds
blog.omnicalculator.com
blog.omnicalculator.com
It looks like a standard calculator and conversion app, and it looks like most of the implementation I could imagine being in a calculator app is already done.
Why would you even think of raising funds? You thought it was a good idea to write the blog post, so it obviously crossed your mind.
I went to their website, tried to find non-trivial calculations and I couldn't find any. I really don't know why there is even a question of whether to raise funding or not.
This app is just an MVP, the future hopefully is much bigger. On of the reasons is "because it's what startups do" and "everybody thinks that's the next step". I do have needs (development, content creation and in-house marketing team), but none of them are a must-have, I can do it a bit slower with whatever means I have at my disposal.
Also from the site "Humans make mistakes. This app doesn’t."
Bold claims.
But I could imagine something like WA with a nice mobile interface being a must have app.
"Much bigger" doesn't need to mean we're gonna send people to Mars. Solving even small problems for tens or hundreds of millions of people qualifies as "much bigger" for me.
I'm curious, what is the most requested new feature you're getting from your users.
Feature request come from markup/profit margin and "trader's" calculator users. And they have more serious needs (and they never want the same thing...).
Of course I can do it, but when I'm talking with people I'd rather do it much faster with less likelihood of a mistake.
Move the decimal point to the left, then double. Boom, %20.
Instead of running around trying to find an answer for "how will you be worth a billion dollars?!?!?!!!!" they should be figuring out where their market is.
I attended a different accelerator than him (but also corporate and in Berlin), and the idea that bootstrapping may be viable, or even that waiting for another 6 to 12 months when one has real feedback from the market, was never brought up. This is especially sad, because the situation in Berlin is basically inverted to the one in SV: Living costs are cheap, raising (seed) money is hard.
Our Demo Day... afaik no startup got an investment because they met an investor there :-) Afaik, some proceeded to later (>12 months) raise money, one did have success with crowd-funding. But we all wasted a serious amount of time training our pitch...
As for the demo day, we were told early on that it's a big thing, but it's unlikely that we'll be discovered then. I got in touch with a pretty great investor who's kinda interested, but I think they're way out of our league now (series A/B level), so we'll wait. Also, on that day we initiated a B2B deal which just might turn out to be what we need at this stage (we're building a prototype now).
I love the Berlin-SV comparison and your conclusion!
We've managed to get 160,000 active wallets (funded), 1000+ devs using the API, 8000 debit cards and terminals in over 30 countries with very little money.
it's amazing how far you can stretch your own money specially if your business has some revenue form day one.
I don't rule out eventually raising for accelerating growth.
_Note: I'm a terrible ESL writer._
I'm a terrible writer, so unlikely, but happy to chat anytime. We are not "successful" yet, long road ahead. Look for @nvk on twitter, can give you my email there.
Also, it's that head-turning thing. They say "we raised X" and you start listening. I had something similar with my downloads count. Honestly, I didn't think 1 million is all that special, but over time I learned I should start most of my pitches with. People just start to listen.
Fast growth is about finding a product that resonates with the market and leveraging that.
That takes time and attention-- not money.
And what do you give up when you chase VC money? The time and attention of the CEO who should be the one finding that product market fit opportunity!
https://itunes.apple.com/fi/app/calcable-spreadsheet-calcula...
I've been working for startups for 25 years, both as early stage employee and as founder.
I feel that the general sentiment really underestimates the cost of VCs.
There's several reasons I'm inclined to pass on VCs:
1. In the early stages it is a huge distraction, and worse, while you're still figuring out what your company really is-- finding product/market fit, etc, having a VC in there pushing the flavor of the day is not a good thing. The VC is looking in the rearview mirror, not at the market and not forward, but chasing whatever's hitting right now.
Notice how many Video sites got funded when YouTube got bought? How many of them are around now? When the latest news means "you gotta have a video story!!@!!" thats just a distraction your startup doesn't need.
When you're at the point that you have a profitable engine and need to scale it, then VC money can be taken and poured into customer acquisition, capital needs to scale production, etc.
But when you're just figuring it out, an accelerator or angel money is the way to go. Or go without if you can, even better.
I'm concerned that Accelerators have been "demo day bootcamps" that focus too much on pitching and not enough on business development (or customer development) ... and slot you right into thaking a big VC round when your company is only a few months old and not ready to scale.
In fact, given my experience, I'd bet if you analyzed the failures of companies that came out of great accelerators, you'd find that a lot of them got VC money (and influence, distractions, etc.) too early.
2. The cost of money from VCs is always too high. They have way too many "hostile" deal terms that they "need because they're taking such a huge risk", but this ignores the fact that you're taking even more risk. Their shares should not be more valuable than your shares that you put actual sweat into. They want special incentives because they are "early money", but you're even earlier money, and worse you spent TIME which is more valuable than money.
Thus the situations where taking VC money makes sense are the ones where you get a rather good deal from them, yet still can't get by with ploughing profits back in, or taking a loan from a bank or some other funding source.
In fact, now that there are angel.co syndicates, why should you take money from VCs? You can raise a couple million from a syndicate of angels, get better terms, and spend less time on angel.co than running around the bay area for half a year.
3. VCs are always pitched as "it's not the money, it's the connections". I've seen very few anecdotes where this turned out to be true, but I've directly experienced many situations where the VCs killed the company. In fact, every VC backed company I've been involved with that failed, and a lot of the early (lower) exits, were caused by VCs. Sometimes these are seen as "fights between the founders" but even then it's because the VCs are trying to force the company to do the wrong thing ("What's your video story?!") and half the founders see it or want to just go along to minimize conflict and the other half of the founders realize it is a company-killing idea. Other times when a founder is too strong the VCs have worked to undermine him, push him out, etc.
VCs meddle too much, and I've seen very little actual productive help.
I have a very small web based business that has the potential to be a $50MM business as well but I am always worried about the same thing if investors even care to blink unless we promise a $1B return/exit ?
Furthermore, why would you want to raise money if your market cap is $50MM? If you were to raise, you'd likely have to exit for upwards of $300-500M to have the same exact returns as not raising. A bootstrapped, $50MM company is absolutely nothing to scoff at.
9. Because it's just a freakin calculator