How Investors Think
Sramana Mitra
Founder and CEO of One Million by the One Million (1Mby1M) Global Virtual Accelerator
If you haven't already, please study my free Bootstrapping course. I publish this series to discuss the nuances of bootstrapped entrepreneurship. Please subscribe to my Best of Bootstrapping series and never miss an article.
If you’ve been bootstrapping your company for a bit, and are wondering whether or not to raise money, remember, investors are looking to multiply the money that they put into startups.
Multiply by how much? 2X? 3X? 5X? 10X? 20X?
This question determines the strategies of what they’re looking to do:
- Look for Unicorns (build companies with billion-dollar market caps): Go from 0 to $100M in revenue in 5–7 years.
- Look for early exits (sell capital-efficient startups and make a lower multiple, but nonetheless, have a successful outcome).
And then, different investors have different investment theses.
Just like you look for product-market fit, you also need to look for investor-entrepreneur fit.
A seed investor looking for a Unicorn won’t invest in a capital-efficient startup that is better suited to a $30M strategic exit. And vice versa.
If you haven’t raised money before, understanding the fundamentals would be critical for you.
You can develop understanding of the fundraising process through some of these courses:
How Pre-Seed Investors Think About Startups with Sramana Mitra
How Seed Investors Think About Startups with Sramana Mitra
Post-Seed and Pre-Series A Investors on Startups with Sramana Mitra
How To Build Unicorn Tech Startups with Sramana Mitra
Alternatives to Unicorn Chasing Investors with Sramana Mitra
Looking For Some Hands-On Advice?
For entrepreneurs who want to discuss their specific businesses with me, I’m very happy to assess your situation during my free online 1Mby1M Roundtables, held almost every week. You can also connect with me during our Rendezvous meetups, and check out my Bootstrapping Course, our YouTube channel, podcast interviews with VCs and Founders, and, to follow my writings, click Follow from here.
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