Thoughts on seeking “Seed Funding”
You can read the long intro post here: https://www.indiehackers.com/post/frustrated-user-to-a-our-own-beta-now-push-the-story-so-far-1fb88d2855
TLDR; We are a small team building a productivity / sharing app with good conversion from our landing page (1300 sign ups) to 900 MAU, good growing 300+ DAU, shipping useful updates, beta has been live 6 weeks, shipped our mobile apps and Chrome Extension but as we approach general release we are considering our options.
The next steps here are a bit of a cross roads, we are considering possibly seeking a small seed / angel round to allow us to perhaps realise our ideas a little faster and afford to pay for a extra developer or two (as we all work full time and have families plus so far 1 of the team has been (willingly) paying for anything that needed to be paid for) but on the other hand we have a pricing strategy (and a positive response to it from our sign up numbers / feedback from users) so we expect that to allow us to be self sufficient over time, but won’t be immediate thus we will still be leaning on the one co-founder that is bank-rolling us so far.
So we are looking for some advice on what might be the best next steps to take, as we come to a general release.
Every situation is a bit different but I think the key is can you be capital efficient with any money that you raise and not start spending on non-essential things.
It sounds like you have a clear plan so if that's the case, I don't think there is any harm in raising a modest amount of money.
The problems start when you raise a lot of money and start spending recklessly.
Stay self-funded (definitely for now) :) Before you get funding you've probably already released the paying version and you can quickly see if traction remains. If it does just stay lean a little longer before you hire another dev or two.
But it’s worth noting too that the reliance on our one co-founder for all our money and knowing it’s from one of us, is still a great motivator when it comes to the product and it’s development.
Defiantly an not a bad option but the only thing is the money we do have is running out as it’s coming from (and due to circumstance can only really come from a) single source so we wanted to see if we could raise some seed money to take the pressure off us all but at the same time raise enough to allow us to grow a little quicker, by allowing us to take on a FTE or two.
A dev cannot directly influence revenue.
Rather implement something like an affiliate marketing or referral program that does sales for you.
Well that can be a rather philosophical argument which I won’t get into here but the job of a dev is to bring value to the customer, which impacts revenue. But at the same time we are working on a referral program right now.
Have you considered looking into indie-friendly investors like Earnest Capital or TinySeed who won't require you to shell out equity? This stuff is relatively new and sits outside the regular VC / Angel divide. Also, both options come with a gigantic network of experienced bootstrappers who mentor the businesses who get funding.
No, but we will look into both, so we really appreciate that tip! 🙌 Earnest Capital looks like a good option at first glance.
might be a little late to the party here.
I'm the co-founder and sole backend engineer on a large SaaS app that's being developers under the eyes of large organizations. My co-founders and I recently sat down to talk about this and what we've realized is basically something that is very similar to your typical founder's dilemma.
what you'll probably need to consider is your type of growth and what the founders want in the long run: if you want rapid growth and high amounts of revenue where you don't care much about being the sole decision maker and owner of the business, then a VC path would suit you best. Otherwise, if you want to focus on organic growth (just enough to make a decent living, but nothing life changing) while still maintaining the majority stake in the company, then bootstrapping might be your best bet.
we decided to go with the VC path because the person offering us money was well connected with our industry, and the need to grow our team was obvious. But there could've been an argument made for going down the organic path.
P.S. the fund that's been helping us is looking for early stage opportunities, so shoot me an email (on my profile) if you want an intro!
We have set our minds on seeking to raise some money in 2021 (we have put some feelers out to a few people in our network for some intros and advice), as things stand we are just finishing up the year by getting out the first full version, moving out of beta, and we will have our subscription model in production. Thanks for sharing your insights 🙌 and an intro would be great, we will reach out to you for sure.
Actually - I asked people a poll related to this a few days ago - please feel free to vote and comment:
https://www.indiehackers.com/post/if-you-were-to-raise-money-from-angel-investors-which-of-these-two-paths-would-you-prefer-c050fe9630