Suki raises $70M to build out its AI voice assistant
The company will use the funding to broaden the scope of its AI, including new administrative tasks
Read more...Everyone knows that MINT has a great product, but few know the strategic moves. To the point, what did it take to get there? How much did it cost to get started? When and how was it smart to raise money such that both the founder and the investors walked away happy? Aaron opened up MINT.com's books - and his old slide decks - tonight to share some shockingly frank details with the startups in attendance. Even more generously, he was happy to have his lessons be blogged for a more public audience:
The straight shot: Why should you raise money, and how much?
Garage Phase: What are the costs and milestones?
Here's how MINT spend its $100K of garage money:Roughly, 2 founders + 1 engineer/contractor = $150K/year burn. This gives you 6 - 9 months of runway before you need to raise a seed round.
In order to get that seed round, you'll need to understand your competition, and come up with projections. Everyone knows this will change...but you need to show your thinking around it anyway. As an example, MINT originally projected $30/user/year for lead-gen and CPA. (Aaron noted that the company is pretty close to this today. But this is the exception rather than the rule.) Know how the business model works. People do X behavior and it turns into $Y income, add up those $Ys and it's a $Z business. If you can walk people through these assumptions convincingly, you'll get that seed round.
Seed Round: What are the next costs and milestones?
MINT.com raised $750K in its seed round to cover these expenses for 12 months, which is about how much time you'll need to develop into the Series A stage.
What model do you build next in order to raise the Series A? Testing and learning from your seed model, show user growth, retention, COGS, revenue per sale/user, and profit. The accumulated loss is how much you need to raise, and a well-though funding strategy combined with an understanding of (hopefully good) business economics is what will speed the Series A process along.
Series A: Now what?
Total burn for a 30-person team: $6M/year. Naturally you don't start out burning this much, as it takes time to grow the team. However the numbers work out, your goals should be the same: Get profitable within 2 years. Raise the capital you need to do this without much distraction.
If you want to raise more after this in order to grow more aggressively or extend otherwise, your success in achieving those first two goals will speak for itself.
(Image source: images.businessweek)
The company will use the funding to broaden the scope of its AI, including new administrative tasks
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