This is akin to a new hire getting excited about a compensation package of salary + 100,000 shares. 100,000 shares, out of how many outstanding? 1 million shares? 10 billion shares? He raised $1.1M, but at what valuation? After reading the article, I was left wondering if the valuation was low. The team has not proven that they have reached product/market fit or found a scalable marketing channel which makes this a risky bet for investors.
Most likely a convertible note - the investment is taken as debt that converts into equity when the venture raises a priced round (viz. a series A). Neither party has to value the venture at the seed stage, which is usually for the best as it's too early to tell.
I mean, you can. You are CEO, and there is AFAIK no legal restriction on you releasing details of your funding. It's just not in your interest to do so.
It doesn't mean nothing. There's a range of equity that will be given away during any round. I don't know how high the variance is but it's probably less than 30% and more than 10%.
How a company with no revenue or product can have a "low" valuation that results in a $1M+ investment is beyond me. Any value beyond $0 is hyperbolic. No revenue, no product, no proof, no value.
Yes, you can have potential value, which is of course what seed round investors invest in, but I find it astounding that there are seeds for technical products that reach even this size. You can produce a prototype for $100k. When it's time to market it, Series A.
I'd love to be happy for you but as someone who's spent a decade building a profitable business and SaaS that's still apparently worth nothing because we make money I can't accept that a $1m+ investment at seed round is a "low valuation". It's not. It's a very generous valuation. Until you have paying customers, your value is $0.
Please don't get me wrong - not trying to denigrate what you guys are doing, or to piss on your parade, but I just find the entire idea that people would say this is a low valuation mind-boggling.
