Earlier this week, Ash Fontana published a post on TechCrunch that is going viral through the entrepreneur community. The post covered how much traction a startup needs to have in order to raise money from VCs. I think the reason it is being shared and re-shared over and over again is because it simply demystifies something that every entrepreneur wants to know.
Bottom line, for the startup I’m working on I would need to grow to 50k a month in revenue. David Cummings followed this coverage of Ash’s TechCrunch article with this informative post suggesting that the milestones Ash suggest would need to be hit within about two years after launching to have a chance to level up with VC money.
According to Ash, the VC milestones are as follows:
If you’re a social company, you’d do well to have at least 100,000 downloads and/or signups before going after your million-dollar round. If you’re running a marketplace or e-commerce company, you should be aiming for around $50K in revenue each month. If you’re going after the enterprise, you’ll want at least 1,000 paid seats at $10 per seat per month (or the equivalent for your pricing model); if you’re focused on big enterprise, you should lock down at least two huge (pilot) contracts.