Raising money in an early-stage company

Raising money for an early-stage company has changed drastically over the last 10 years. I was on both sides of the bubble. Overall I was able to raise $23M in equity and debt for the two companies that I was COO for.

Here are some of the learnings:

1) ALWAYS get more money than you (or your financial model says you) need

2) Point 1 means build a realistic financial model

A realistic model should tie completely to your business plan. If you update one, the other one better be updated too. Potential investors are always looking for reasons not to invest. If there are inconsistencies, they'll jump all over it.

What is a realistic financial model?
A) Have a detailed monthly revenue page with all the sales channels (You will spend a lot of time discussing this information)
B) Think of all the costs of goods/service components. What will it take to actually service all of the revenues, i.e. customer service, manufacturing, etc.
C) Finally what's your overhead going to be/extra labor needed to run the company. Do you have an internal software team? How much space are you going to need? Do you have marketing programs/team to support the sales? What other hard assets will you need? How many computers/printers/scanners, etc will you need?

3) And finally once you have your business plan and your financial model completed, you need to do the most difficult task, value your company. Depending on what stage of funding (and growth) your company is at will dictate whom you have to negotiate with (i.e. current investors, founders, new investors, employees).

One of the next topics - who to go after and how to go after them