Lessons Learned about Pitching Investors from a First-Time Entrepreneur (opens in new tab)

You're right - if we gave up 80% of the company, it would be an awful raise. However, it's a pretty fair assumption that we didn't do that. We chose to take in $1M instead of $300K (which is all we needed). Why would we take in more capital if the valuation wasn't fair?

Good chance it was convertible debt; thus there's no official valuation to report. What matters are any valuation caps on the conversion and the next-round valuation.

My guess would be the seed investors have terms that are essentially like having 20-30% of the current company. Selling an effective majority stake (or anything near it) in a 'seed' round isn't a typical valley thing.

Good question! The simple answer is that our cofounders are immigrants and we need to support their H1B visa for them to be full-time. Unfortunately, we cannot support their visa without funding. Furthermore, investment is a way to accelerate growth. We're now able to hire additional team members and pay ourselves salaries (I had $250 left in my bank account and $3K in credit card debt when we raised money, so we were nearly broke).

Hope this helps! - Gagan, Cofounder of Udemy

Thanks man! Appreciate it...