georgios22
New member
Hello YC Community,
I'm a Co-Founder of a Developer Tool startup and I'm looking for some situational advice. Just to set the stage we went live with a product 7 months ago, had a couple hundred people try out the product, and got ~65 people to really use the tool in a consistent manner for mission critical stuff. After two months of being live we got a ton of really useful feedback from a majority of our users. It has required a major redesign and now we are looking to raise capital because we need the engineering velocity.
At the moment we are about two months into raising a pre-seed round (finished an accelerator with angel investment this past Dec). We have met with 24 VC firms (22 came inbound to us) and the waters feel a bit murky. 9 have flat out rejected us, 4 only cut checks above $2M which isn't what we are looking for, 5 want to wait for additional traction, 2 are super top of funnel, and 4 are currently open and we are undergoing due diligence with them.
I'm the less technical founder (Business Intelligence / Data Analytics background) so I do a limited amount of coding and I'm just building sales and investor pipeline at the moment. Our CEO and core engineer is worried about the lack of progress being made on the product (I completely agree). He's growing skeptical that at this point in time we can raise and wants to postpone it another 4-6 months until we have better traction metrics.
I'm a bit torn because our first 5-10 meetings we were so much less prepared, had limited investor material, and didn't know the answers to some pretty critical questions. I personally feel much better about pitching the product now and I think we can raise capital NOW.
I see three options:
I'm a Co-Founder of a Developer Tool startup and I'm looking for some situational advice. Just to set the stage we went live with a product 7 months ago, had a couple hundred people try out the product, and got ~65 people to really use the tool in a consistent manner for mission critical stuff. After two months of being live we got a ton of really useful feedback from a majority of our users. It has required a major redesign and now we are looking to raise capital because we need the engineering velocity.
At the moment we are about two months into raising a pre-seed round (finished an accelerator with angel investment this past Dec). We have met with 24 VC firms (22 came inbound to us) and the waters feel a bit murky. 9 have flat out rejected us, 4 only cut checks above $2M which isn't what we are looking for, 5 want to wait for additional traction, 2 are super top of funnel, and 4 are currently open and we are undergoing due diligence with them.
I'm the less technical founder (Business Intelligence / Data Analytics background) so I do a limited amount of coding and I'm just building sales and investor pipeline at the moment. Our CEO and core engineer is worried about the lack of progress being made on the product (I completely agree). He's growing skeptical that at this point in time we can raise and wants to postpone it another 4-6 months until we have better traction metrics.
I'm a bit torn because our first 5-10 meetings we were so much less prepared, had limited investor material, and didn't know the answers to some pretty critical questions. I personally feel much better about pitching the product now and I think we can raise capital NOW.
I see three options:
- Power through and keep meeting with investors (get capital now)
- Recruit friends who are good engineers and give them equity, increase engineering velocity, and raise again in 1.5 - 2 months/flip on revenue generation earlier
- Tough it out the next 4-6 months, run out of money but have a lot more traction, and try raising again. But we have a more mature product we can monetize