Investors fund growth. This app has demonstrated growth.
Isn't $1M pretty much pocket change for big investment funds? What if this app becomes the next Snapchat?
Users give leverage. If the team is dedicated, and they can pivot their adoption into long-term growth, then it was a good investment.
Startup investing is counter-intuitive by nature. It's counter-intuitive for most people to think of $1M as a small amount of money, but to a fund it might be. And if it's a small amount of money, then there's no downside to invest in them. Whereas if they miss their chance to invest in the next big company, then those same investors will ultimately lose, because the entire model of VC depends on (a) investing in a big winner, (b) early.
EDIT: Well, that's what I get for not researching before speaking. 1MM in this case was a large amount of money for any angel investor. But the premise of investing early in a big winner is the central idea.
Isn't $1M pretty much pocket change for big investment funds? What if this app becomes the next Snapchat?
Users give leverage. If the team is dedicated, and they can pivot their adoption into long-term growth, then it was a good investment.
Startup investing is counter-intuitive by nature. It's counter-intuitive for most people to think of $1M as a small amount of money, but to a fund it might be. And if it's a small amount of money, then there's no downside to invest in them. Whereas if they miss their chance to invest in the next big company, then those same investors will ultimately lose, because the entire model of VC depends on (a) investing in a big winner, (b) early.
EDIT: Well, that's what I get for not researching before speaking. 1MM in this case was a large amount of money for any angel investor. But the premise of investing early in a big winner is the central idea.