As I'm in a similar position as you (though not concretely planning to found a company right now), some of my thoughts and experiences:
- It appears as pitches talking about training/deploying/productionizing "LLMs" and "foundation models" are amongst the most successful these days while MLOps is on the decline (which was massively hyped a few years ago, but reality has caught up)
- You should be able to somewhat justify your valuation and tell a good story around it. Usual factors on valuation are the experience and network of the founders, stage and traction of the product and overall climate of the business sector. It's a good idea to research recent founding rounds of related start-ups in a similar stage as you.
- Predicting financial KPIs with a high level of precision is impossible at your stage and everybody including investors knows this. At the same time, this does not mean that you don't need a business plan. At a higher level, the projections should represent your plans on when and how to monetize your product and the cost drivers and KPIs behind it.
- Where you raise depends on your preferences and business context. For example, if you should have a high focus on data protection and privacy, it would fit greatly into your story if you had only local investors since some customers in Europe immediately see a red flag if US or Chinese people are involved.
I have many more thoughts but not so much time to type - DM me if you think an exchange could be helpful.
> if you should have a high focus on data protection and privacy, it would fit greatly into your story if you had only local investors since some customers in Europe immediately see a red flag if US or Chinese people are involved.
Yeah no. If you're going for a fundraise, you would be extremely foolish to rely on relatively inexperienced EU and local investors over investors from the US and elsewhere. It's an open truth that EU VCs are rather stingy with their pursestrings, and would rather undercut your valuation by a ton.
There are risks around geopolitical issues though, so eg: having a bunch of Chinese/Russian investors may not be the best route for you. The optics can turn sour, and the value they can add is definitely questionable in the current hostile climate.
You can guarantee compliance with EU rules as long as you provide an EU-based option. If some customers don't like that, trust me, you don't want such inflexible customers either. Eg.: PostHog recently launched EU based cloud hosting for GDPR compliance, and they are a successful privacy-centric product even though they're backed by largely American investors (and the founders are European).
I never claimed it was a generally good idea to raise locally. It depends on the context of the bigger Story.
> You can guarantee compliance with EU rules as long as you provide an EU-based option.
Not true due to Patriot Act (if your HQ are in the US). I don't require my customers to be flexible either as long as they are good business and I can create something that helps them.
