How much should I raise in my angel round? How should I spend it?

Mind sharing where you were at (product wise) prior to the $700k raise?

Stoked to see we are in sync... the data I put together is based on a couple of dozen investments in this stage. Some folks do it cheaper, some folks spend more money.

Is the person getting a lower salary for personal reasons being compensated with higher stock? Or is everyone being altruistic about it -- "I won't drain cash if I don't need it"?

First, cool of you to talk about your situation. My 2 cents: salaries seem high even if all in SF. I think it's reasonable to go with reduced salaries at seed stage. If there's concern, include full salaries in offer pending fundraising/revenue. Cash is extremely valuable. The first few people need to bear down. As you say, they're working for the challenge and the promise, not the money.

I've invested in a bunch that have raised 1mln+ but that extra money just prolongs the same misery, while creating the illusion that they still have the funds to figure things out. I recommend maybe 1 mln rather than 750.

It boils down to risk tolerance. If Elon Musk were to say "I'm thinking of doing something new, just not sure what yet", someone will throw $7.5M at him. On the other hand, if you're not a big name with an established track record then showing up with just an idea isn't going to get you very far. The more you can demonstrate to reduce risk, the more likely you'll be in successfully raising funds.

750k seems like a lot to me as well, however I have done startups that are very lean and all the investors are people that are working on the product.

35-70k of my own money was more than sufficient. The problem is once you're live, trying to get enough income while growing the company and having other jobs so you can fund your own needs makes it very difficult (have failed 7 out of 7, just to varying degrees, 3 made multiples of money back but died off, 4 went down in a flaming pile of dung).

I've done all but one of my startups in the midwest though (one in SF, SF failed out of the gate).

I don't like the money game, so I'll probably never have a startup take off, but trading away too much seems like it's not worth it. I don't do startups to get rich, I do them so I have clients/customers to answer to instead of asshole bosses.

My most successful startup was the one I regret (first I ever did alone 100% on my own dime). I should have gone after money 9-12 months in once I had a stable (although needing lots of work) product and 13 clients.

I imagine this varies on a case by case basis. Since this is often not publicly disclosed, its difficult to know exactly. In my personal experience at a few firms, the seed money came with an MVP that had proven an ability to get users and provide value.

Your next question is how many users, I imagine. This varies by the product/service. Working B2B? You don't need thousands. Doing something consumer facing or social? You need a lot, and a hook. Or something no one else has done that catches someone's attention that has a lot of money.

750k is a lot in the real world... then you move to the Bay Area and run into the cost of living issues: rent, transportation.

It's very hard to find housing under $2k a month per person -- so if you make $7k a month and have X left after it you're going to be surviving on 75-100k a month... but it's like getting paid $50k in Atlanta: small apartment, decent food but no savings or big Hawaii trips.

It depends, and there are factors which can make the usual rules not apply. The right team / the right story / the right moment / the right competitive dynamic among investors / etc means you can raise on, essentially, nothing else. If you have to ask whether this will apply in your case, it will not.

Anecdotally, the bar for a seed round in software is a) the product exists, b) real people are using it happily every day, and c) you're collecting proof points that it is a nascent business. (As distinct from a hobby project.)

If forced to put a number on it, for B2B SaaS, you've got either an LOI or contract for an anchor enterprise customer paying $50k+ or you've got thousands a month in low-touch revenue and it is increasing rapidly. Note that thousands is not tens of thousands. It may have been a while ago.

There are also huge X factors here. Location is one. Ask Matt Wensing about the frustrations of having the White House Situation Room as a paying client and being told that that was insufficient grounds to fund them because the TAM of WHSRs was 1 and, as they already had it, the investor didn't see the growth story.

Did you have a finished game before, and if you did, did you have paying customers?

Really? I mean, that represents astonishingly bad value for a bunch of reasons. The first is that that's not SEIS covered, because it vastly reduces (by 70%) the risk exposure of the capital, and consequently the %. Especially if you'll include video games tax credits on thus back end that let you stretch that runway. Beyond that, you've also not used the full SEIS value -£150k, so again, shot yourself in there foot. This wouldn't be typical of valuations that I see working with startups, it's far more in the order of 10-17.5% for £150k (with SEIS coverage). Gaming is obviously it's own beast, but the same rules on making the investment tax efficient for the investor apply, and I'm surprised anyone gets any investment with ought SEIS any more.

With that in mind - advice is always to raise as high as you can on angel, because it's covered for the investor, and you can only do it once.

London based too - what exactly was that 40 percent of? Would be interested to find out, as a colleague of mine can reveal the following details for comparison: 20 percent of equity in a B2B company (not even live yet; but customers already signed up), five developers plus owner, central London based, amount invested £1.4MM. I am not sure how much haggling was involved but he was happy as the investor has a proven record with B2B in the UK, and can probably help it in the mid to long term.

Seemed like a lot to me, too, but a few patents can eat that up fast.

If you're planning on making it last 18 months, $100k is probably in the right order of magnitude. Incorporation fees, corporate taxes, liability insurance, workers comp., 409a valuations, audit fees, patent / IP expense, trademarks...

You'd be surprised at the number of $5k bills you get from various parts of running a business.

You can have some fees deferred. but $3k per person for computers is $12k... company formation is $5-10k, convertible note is $5-10k, terms of service, IP assignment, etc. Patents are $10-50k depending on how far you take them.

$120k is high, but not outrageous.

and I am sure Vietnam is awesome, but is it awesome for building a startup? Numbers say no, otherwise most startups would be in Vietnam, not in SF :)

1990s were a long time ago as well.