Are You Ready to Raise $1,000,000?

In the world of startups, one question echoes daily: “What do I need to do to secure funding?” This query is particularly common among founders looking to take their ventures to the next level. At Multiples, we’ve had the privilege of guiding 8 startups, through their funding journeys, helping them successfully close rounds of over $1 million. Here’s a glimpse into our experiences and some key insights from their journeys.

A Candid Note on Readiness

Before diving into the specifics, it’s essential to note that there are no fixed numbers or universal criteria that guarantee funding success. Each startup’s situation and timing are unique. For instance, a strong team or a product with high demand can be pivotal in securing investment.

The aim of this post is to share the experiences we’ve gathered while assisting these startups, particularly those that don’t hail from well-funded backgrounds and lack extensive investor networks.

The Journey to Funding: Key Insights

1. Email Outreach: On average, each startup sent out approximately 340 emails. These emails targeted investors and analysts directly, as well as co-founders and consultants for introductions.
2. Targeted Investor Lists: The startups aimed their efforts at a list of 80 to 180 potential investors.
3. First Meetings: Around 42 investors agreed to an initial meeting, out of which 15 progressed to a second meeting, and ultimately 4 participated in the funding round.
4. Company Age: The average age of the startups was about 21 months, with a mix of those that had received funding previously and those that had not.
5. Preparation Time: Startups that engaged with investors early on (even before officially beginning their funding rounds) saw their rounds take about 4 months. In contrast, those that waited until the round was officially underway took an average of 7 months—from the first email sent to receiving the initial fund transfer.
6. Monthly Revenue: Just prior to securing funding, these startups reported monthly revenues ranging from $40,000 to $90,000.
7. Annual Revenue: The average revenue for the year leading up to their funding was $125,000.
8. Valuation Insights: The average company valuation at the time of the round was $7.69 million, with investors acquiring roughly 13% of equity.
9. Valuation Adjustments: On average, startups saw a decrease of 20-25% in their expected valuations before the round began, compared to valuations derived from methods like the VC method, discounted cash flow (DCF), or comparable analyses.
10. Growth Metrics: These startups exhibited an impressive monthly growth rate of 22.5% in revenue and 19.6% in user base.
11. Customer Retention: For B2C startups, the customer retention rate was about 20.5%, while B2B companies had a churn rate averaging 7%, with all B2B companies operating on a subscription basis.
12. Defensibility and Barriers: Each startup had clearly defined and documented defensibility and barriers to entry.
13. Data Rooms: On average, each startup maintained a data room containing 25 essential documents.
14. Founders’ Experience: The average age of the co-founders across these startups was 36 years. Notably, two or more co-founders from five startups had previously worked together before embarking on their current venture.

Embarking on the funding journey may seem daunting, but with the right preparation, strategies, and insights, you can significantly enhance your chances of success.

🚀 Ready to fuel your startup’s growth? Join multiples.cc today! Gain access to valuable tools, connect with investors, and get personalized support to help you succeed on your fundraising journey. Sign up now and take the next step toward securing the resources your startup needs to thrive!