A big chunk of my revenue comes from one source. Is that a huge negative in raising money from angels?


2

I have a software product and one enterprise client accounts for over 70% of my revenues right now. Is that a huge negative for investors? How can I mitigate that risk?

Our goal is to use the money raised to hire sales people to get more enterprise clients. We got the first client by pure luck. I'm not a sales person so it will be hard for me to close sales.

It's kind of a round-robin situation. We need money to grow and diversify our client base.

Risk Monetization Enterprise Investors

asked Mar 17 '14 at 16:48
Blank
David Harman
20 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

1 Answer


1

Having only one enterprise client is not necessarily a negative for start-ups seeking investors. Especially since you seem to have a few other customers; this is just your best source of metrics. I've seen lots of folks pitch with zero enterprise clients.

Not to say that some folks wont be turned off that you're not "more established" but you can definitely use this as an advantage. If you can - try to put together a solid, researched marketing campaign (as opposed to just throwing expensive sales people right away) with consultant(s) . Focus on areas where you provide value to your current enterprise client, this way you can demonstrate to any angel investors that you've got a solution to a real world problem, and have the proof to back it up.

Most of them should be able too see that if you had some funding to pump into your campaign, and a -small- but effective sales person/team, you've got a real product. This should attract funding with a little time and effort; most start-up investors aren't looking for a 'sure thing' but a reasonable risk.

answered Mar 17 '14 at 19:31
Blank
Garet Claborn
324 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Risk Monetization Enterprise Investors