Raise Amount
Choosing the right fundraising goal is crucial. Your goal should be high enough to achieve your business objectives but realistic enough to meet or exceed. Equity raises start at a minimum of $10,000 and can go up to $10 million.
Fundraising Duration
Your fundraising campaign can last as long as you choose. However, maintaining an active profile requires a monthly hosting fee. Typically, equity fundraisers last between 60 and 90 days.
Valuation
Valuation represents the company's worth at the time of investment. Ensure that your valuation includes the amount you plan to raise (known as "Post-Money Valuation"). For example, if you value your company at $750,000 and are raising $250,000, your post-money valuation would be $1 million, meaning investors receive 25% equity, including their investment.
Equity vs. Convertible Debt
Startups can structure their fundraising using either equity or convertible debt:
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Equity: Investors receive a percentage of ownership at a fixed valuation upon investment.
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Convertible Debt: The valuation is deferred to a later date, such as when a future funding round is completed, making it a flexible option for early-stage companies.
Deal Terms
You may specify additional deal terms in your fundraising profile, such as a Valuation Cap for a Convertible Debt round. These terms help investors understand the structure and potential upside of their investment.
Expert Consultation
Before finalizing your fundraising terms, consulting with an attorney is highly recommended to ensure they align with your business strategy and legal requirements.
For additional guidance, you may check our crowdfunding resources to support you along the way. You can also explore Startups.com workshops or one-on-one advisory sessions, where experts provide insights on fundraising and legal considerations.