
You just signed your first customer! Is it time to raise a pre-seed round?
A founder on Reddit is in this exact situation. He just made his first revenue — $3,000 from one client. That’s a huge milestone!
But it’s probably not enough to raise a full pre-seed. Here’s what he should do instead…
The Accelerator Path
For a founder just beginning to pull in revenue, accelerators are the best next step.
That trickle of revenue will make it much easier to get into a good program.
An accelerator could put this founder in a perfect position. He’ll get the $100k to $500k he needs. That gives him several months to keep growing.
Once he hits a couple hundred thousand in ARR, he’ll be in a great position for a round in the millions.
Some Founders Skip the Line
Some founders raise millions of dollars with just a couple of text messages. The caveat: they usually have an incredible track record.
If a founder sold their last company for $1 billion, everyone will be rushing to fund them before they even make a deck.
Most founders don’t have that gold-plated track record. They need to prove themselves before they can raise money.
Understanding How Fundable You Really Are
Every day, I meet founders who think they’re ready to raise a pre-seed round of $500k to $2 million. I often have to tell them that isn’t realistic.
Instead, I suggest accelerators.
I can tell a lot of them get frustrated when I mention this! They think they’re past that point.
But with neither strong traction nor a strong track record, it’s hard to raise a full funding round. Most founders are better off raising a smaller amount now and continuing to build.
You can still raise that fat round later. But you’re going to need a little more traction to do it.
Wrap-Up
If you’re a founder who just signed their first customer, my hat is off to you! But this is just the beginning.
Even with a trickle of revenue, raising money is a hard slog for most founders. Take it step by step.
Build the product. Get a customer or two. Get into a strong accelerator program.
Bust your hump in that program and grow as fast as you can.
When you graduate, you’ll be ready to raise millions.
More on tech:
How to Write Cold Emails to Investors That Actually Get Replies
Why Short Decks Raise Millions
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