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What is the maximum amount of money a pre-revenue mobile Internet startup can expect to raise from the VCs?

To start with, a pre-revenue mobile company cannot expect to raise anything from “the VCs”. Venture capital funds invest in only one out of every 400 companies seeking funding, so the odds of your particular startup getting funded are astronomically against you.

Next, venture capital funds invest primarily in later stage companies that have already shown significant indications of success (known in the industry as “traction”.)  Of the roughy $20 billion invested every year by US venture capital funds, only $300 million (1.5%) goes into startups.  For a true startup to be able to raise venture funding, you would need to be perceived as a better bet than virtually every company graduating from yCombinator, TechStars, DreamIT, etc. Conceivable, but unlikely.

So if not from VCs, where might your pre-revenue mobile startup raise funds? I can tell you that it will be a very challenging and painful process, but the most likely source will be from Angel Investors, individual people who, by themselves or together in groups, take the risk of investing seed funding in pre-revenue companies.

I’ve written a lengthy answer about the amounts and sources you might expect to find, in David S. Rose’s answer to What is the range of capital you can expect from an Angel vs VC?.

Good luck with your venture!

 

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

Written by David S. Rose

user David S. Rose Founder and CEO,
Gust

David has been described as "the Father of Angel Investing in New York" by Crain's New York Business, & a "world conquering entrepreneur" by BusinessWeek. He is a serial entrepreneur & Inc 500 CEO who chairs New York Angels, one of the most active angel investment groups. David is also CEO of Gust.

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