Product & Startup Builder

4 Things You Need To Prove To Raise Capital & Have A Good Exit

Added on by Chris Saad.

If you're building & running a self-serve consumer app, you really only need to prove 4 things to raise capital and have a good exit

  1. You can spend $x on acquiring a user and get $y in return. Where y is the Customer Life Time Value (LTV). It’s ok if Y is initially less than X (this is investing/subsidizing growth - see point 3).

  2. The market your addressing is large enough such that your total revenue can become meaningfully large.

  3. You have a clear and believable strategy to reduce the cost of X and increase the return of Y (This is essential if X is still greater than Y)

  4. You have an IPO in your future and/or (more likely) you have a number of potential acquirers lined up - ideally you've started building relationships with them already.

Originally Posted On Facebook