We are a B2B mobile SaaS product currently raising our first round. We are live with beta product. We are raising $500k seed which will give us 6-9 months runway. The majority of the funds are for salaries (low for founding team) but include sales, development hires etc… some potential investors have expressing concern over a large portion of the seed going towards salaries. We are not just taking a salary and working on passion projects, we ARE obviously evoling the product and launching customers!!! How do you justify (or hide) that the majority of the seed goes to salaries and for good reason? We didn’t want to be greedy and ask for too much, we wanted to demonstrate being lean.
Or should we be raising a couple million $ instead? … and show how much further the product could be and the sales pipeline executed upon if we 3x or 4x the $500k amount. We’ve also been told that SaaS modules need way more money up front than you think.
Should investors be concerned that the majority of a $500k is going to salaries? We are not college kids eating noodles 24-7. We are experienced brand and technology experts (yet first time fundraising) and we need to survive. Would investors be cautious if we’re not sure on if we ned $500 or $2M for example?
As a balance we’re showing in our investor deck what $500k could get us in terms of product evolution/advancement vs $2M … which we can speak to comfortably. Important to keep in mind that we have a longer sales cycle being B2B, but once we’re in, we’re in.
Anyone have any insights here?