Tips on how much money to ask for from investors
If you do decide to seek investors or even crowdfunding, the next question is "How much money should I ask for?". The simple answer is the amount you need to make your plan work. Some technical entrepreneurs try to start with a huge number, hoping they can negotiate and close on a smaller one, while others understate their requirements, in the hope of getting their foot in the door with an investor.
Neither of these strategies is a good one, as both are likely to damage your credibility with potential investors even before they look hard at your plan. Here are the parameters you should use to size your request, and be able to justify your request to investors:
Consider implied ownership costs: If your company is in its early stage and has a valuation under $1M, don't ask for a $5M investment. The investor would be buying your company five times over, and he doesn't want it. If your valuation is around $1M, you can validly ask for $200K-$300K...
