The Art of Startup Fundraising

9Deciding Investment Amounts and Prospects

Now that we understand the various investment rounds that you will encounter throughout the development of your startup, it's important to have a strategy for how to identify and engage with prospects, as well as a realistic concept of how much to ask from investors.

Needed, Realistic, and Ideal Investment Levels

Before we identify prospective investors, you should implicitly understand the differences between needed, realistic, and ideal investments. You should develop a separate costing outline for each, allowing you to understand what your company needs to launch, survive, grow, and return a profit for you and your investors. It will also provide you with a clearer way to identify needed, realistic, and ideal investors during the negotiation process, leading to a strong valuation of your startup.

• Ideal investment: This investment level is the best-case scenario. This level of investment that will allow you to put in place all of your infrastructure as well as covering all manufacturing, distribution, and advertising costs. Not only that, but an ideal investment will provide enough capital to cover all costs and provide your startup with a substantial reserve for future expansion. Gaining ideal investment straightaway, if at all, is very rare, but defining the perfect scenario will help to create a good project roadmap.
• Needed investment: This is the investment amount you require to meet your startup's immediate goals. Those goals ...