Choosing a fundraise goal amount is an important element of every campaign. Here, we will discuss ways to come up with a realistic fundraise goal.
What are Your Milestones?
How much capital do you need to reach your next major milestone? This could be building a prototype, expanding distribution, purchasing inventory, building a store, etc. Explore pricing options, various manufacturers, and take a hard look at what’s necessary and what’s just nice to have.
Once you’ve determined how much money is necessary to reach your startup’s next milestone, you can choose what raise amount fits your needs best. Pairing your fundraising goals back to specific milestones can help you set more achievable goals.
Is a Rewards or Equity campaign the best fit?
Do you plan to raise $100,000 for your startup? If so, a rewards raise might not be the best option for your crowdfunding campaign; an equity campaign could be a better way for you to connect with larger donors.
How much Equity are you willing to give up?
If you’ve determined that an equity based raise makes the most sense for your startup, the next step is to determine your pre money valuation, how much capital you need to raise, and how much equity you are willing to give up.
The amount of equity you’ll give up is directly proportional to what percentage of the post money valuation your investors will have contributed. For example, if your startup is valued at $1 million and you’re seeking a $500,000 equity investment round, you’ll end up retaining roughly 66% equity while investors will receive roughly 33%.