When is 200k more than 2 million?

Consider this: You’re a start-up looking for 200k in funding; you have little cash resources ; and you are trying to build or complete your service prototype in order to win your first customers. Your only asset is your idea. Times are tough  so you are prepared to concede up to 25% or 30% for the seed funding of 200k.

As an investor I am seeing you as an unproven idea that has not managed to convince close associates of the compelling value of your service. If you had already proven your concept in the market ; had a track record with some customers ;and had already convinced your closest sources of support for early stage funding - you would probably now be looking for 2m for the same 25% of equity. The paradox is that it may be easier to raise the 2m than it is to raise the 200k – mainly because of the track record of the proven customer base which makes the venture less risky.

Early stage companies always need cash but the value of an early customer base cannot be underestimated. That is the concept underlying the ‘Market Accelerator’. For the service innovators it is achieved by providing access to the market base of participating Operators for experimental and early stage prototype initiatives to allow these initiatives to be fine tuned and market proven. For the Operators it is achieved by providing them with genuinely innovative services to address the need for new revenue generation and to supplement declining ARPU’s from a growing base.

If this approach is one which you would like to explore further  you can contact me at noel@onetree.ie  and +353 861720700


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