I've been running a site (community platform) for a couple years and now we are growing fast, getting strong user traction and started implementing a customer oriented business model. In order to speed up growth I need to redo the platform to make it more customized, stable and scalable. I teamed up with technical co-founder, got advisory support and the project has attracted the attention of everyone I showed so far.
To rebuild the site (and evolve it to a better and more customer-tailored solution) I need an in-house dev team, full time dedication and cover some overheads like servers or small office. For this I want to pitch to VCs but I can't figure out what funding stage we are, thus what we are looking for.
Considering the site already exists in a primitive form of the concept, this would be presented as a working prototype with strong proven insights of the market. Until now we have been funded through donations so that could be considered as seed funding to bring the idea to market.
If I look to my cost structure for the next 12 months is:
- 2 founders cost of living (CEO&CTO): 60K, at minimum
- Frontend dev, backend dev and UX designer: 120K
- Office, equipment and servers: 40K
- Administration, legal and site buyout: 30K
- Marketing, travel and others: 20K
- Additional 30%, as upper margin
Total of 350K euros.
According to my knowledge under 500K is seed round. However we already have user traction, a prototype in market and crowd funded.
I believe we already passed seed stage, but a rough estimation of the costs are still under 500K. I can't figure out how other companies within the market have Series A rounds with several milions. What am I doing wrong, the costs should be increased (eg. bigger team) and extended to more months or we are still raising for seed capital? How do you determine your fund raising stage?
Thank you in advance
