The Real Cost of Raising Capital: Budgeting for Success (And Avoiding Cash Burn)

Raising money costs money — but how much, and where does it actually go? In this episode, Martin and Brendan break down the true cost of running an evergreen capital raise, from pre-launch legal and platform fees to the ad spend that drives investors through the door.

They cover what it really takes to "prime the pump" (think $20K–$50K+ before you raise a cent), why your minimum viable marketing budget runs ~20% of a crowdfund target versus 8–12% for accredited Reg D raises, and the single biggest misconception founders have: that you need the full marketing budget sitting in the bank on day one (you don't).

You'll also hear why compressing your timeline almost always raises your cost of capital, how to think about the critical first three months to break-even, and the second- and third-order costs — staffing, shiny-object channels, wasted ad spend — that quietly burn cash mid-raise.

A practical, numbers-forward conversation for any founder weighing whether this method is worth the spend.

Transcript

SPEAKER_01 0:08

Welcome everybody to the highly anticipated, highly regarded, highly reviewed Behind the Rays podcast episode four. Today we are going to be talking about the real cost of raising capital, budgeting for success, and avoiding cash burn. And the reason this topic is so important is there's a lot of ironies in these capital raises. And first irony is that it's in private capital markets, but it's an extremely public process. And then the second irony is that you're raising money, but it's gonna cost you money to raise money. And so that's what we're here to talk about is the cost of doing that. And we are gonna talk about some hard costs, we will talk about some time costs. This episode is not for the emotional costs, but that will be discussed at some point in later episodes. So let's get into it. Yeah, first off, I think the biggest misconception around some of these capital raises is that one is that they sort of run themselves. That's a misconception, I think, that we dealt with in our previous episode, talking about the role of the founder, what they can do. The second would be that just in terms of the cost commitment here, and it's such a different type of raise, I think a lot of founders in different spaces are used to just like going out and pitching and getting a large check size, but it's East or Famine cycle, where you're talking with either VCs or you're talking with institutions and you maybe get like large check once a year or twice a year or something like that. And really what we're talking about with these types of raises is what we would describe as our evergreen capital raising engine, where you're bringing in money on a monthly basis or literally daily basis, but ideally we're tracking it on a monthly basis. That takes a little bit of capital to jumpstart that process. And so we wanted to in this episode give a little bit of insight in terms of what's required to prime the pump and what are some like baseline budget needs that you have, and then how can you get marketing to cover those costs and what are the timelines for that? And how does the system scale up budget-wise? So that all sounds good. I'm gonna cover some of the ancillary and costs outside of marketing that founders should take into consideration before we open it up and bring Brendan in on the marketing budget side. So before a raise even goes live, there's a couple of costs to consider here. One, there's legal and compliance. So you're gonna need to draft up your regulation documents. So these would be either your reg D, Reg CF documents, form C's, that type of stuff. That can be anywhere between 15,000 to you know, upwards to 75, depending on the complexity of the RAIS. Maybe if you're doing like a reg A, we have a client right now that's targeting a NASDAQ listing after a Reg CF. So they're basically drafting their legal documents to be NASDAQ ready, and they're basically treating their Form C as the S1 to get onto the NASDAQ. And so their Form C is like super intense because they need to be as transparent as possible and show as much disclosure as possible for their NASDAQ listing. And so that's costing them a lot more in terms of the legal. I guess you know, legal also does speak a little bit to time because legal takes time and they charge by time. So that's another thing that might come up. There's platform fees here. Platform fees can be, you know, like three to eight percent of your raise. There's a startup cost sometimes to platforms, which can be between five to twenty K, depending on what type of raise that you're doing. There's creative production in our case at Virtual Ad that's included in your setup fee. So it's not a separate cost there, but just one of the line items. But if you're doing creative production separately, it could be anywhere between five to 25. Video production for the landing page video, so five to 30, landing page to funnel setup. I guess this would be, you know, on our side, on the marketing side, where correct me if I'm wrong, Brennan here. But what we're setting up on the marketing side is uh we set up the CRM, we set up the email automations, write the email automations, design the email automations, we do a messaging strategy. Actually, even before all of that, we just do like the funnel and raise strategy. So we work with the client. Or what I would say is like, I always say that we consult from a marketing perspective where we talk to them about the benefits of doing like a reg A, reg D, reg C and kind of like show them the impacts from a marketing perspective and how much you'd be spending per raise. And then we develop the messaging strategy. So we try to create an all-encompassing elevator pitch is like the baseline message that everybody can reiterate per raise and then start to apply that to the different assets creatively, which are the landing page, they're the ads that we're making, webinar content, webinar ad content, webinar landing pages, retargeting pages, email automations. Then obviously, in terms of the setup fee, I would say that's also the CRM integrations with the investment platforms and publisher planning. That kind of covers the bulk of the ad agency setup. That typically goes for about 15K. So yeah, I would say all in, you could be looking at on, you know, on the low end, maybe 20 to 30 K or 50K. If you're doing a super intense setup, maybe it's even more than that. So those are some pre-raise budgets that before you even like raise a cent, you're already looking at that. So that's something to consider. And that's why you generally see companies that are already generating cash flow doing these types of raises because they already have some sort of capital stack or revenue that they can allocate to this. But that's enough of me chatting, Brendan, into the conversation, talk a little bit about marketing budgets. And maybe Brendan, you can kind of come in here because you've done a lot of planning with clients from the off the hop, scaling them up. Maybe you could just talk a little bit about the process and give some insights in terms of where do you even start with a client when they come to you and they're like, hey, we want to raise $50 million or $20 million. Like, where do you go from there?

SPEAKER_00 5:34

Yeah, that's a good question, Martin. I think like, you know, obviously we want to work backwards from their goal and the timeline to achieve that goal. The actual offering exemption plays a big role in terms of how we're going to manage the marketing funnel. So, you know, if it's a crowd fund, the marketing funnel needs to be a lot more transactional. If it's not, and it's something that's more centered around booking investor meetings, you know, then the marketing funnel would also look a little bit different. In terms of the budgeting and the planning around the total target raise, again, it's sort of a function of the offering itself. For crowd funds, for instance, we have some metrics that we feel pretty confident in based on just past raises that we've done with clients. So, you know, we can kind of work backwards with what we think is realistic in terms of investor acquisition, cost per investor acquisition, average investment amount, for instance. So, you know, we've got a pretty good understanding of how much someone typically invests with a crowdfund and the conversion rates to closing an investor. We'll kind of work backwards with the metrics that we're confident in to build out a budget plan to get you to where you want to be when it comes to your total target raise. So I think, like in terms of cost of capital, it really can range. You know, we've seen some examples where the cost of capital with some of our clients here in Canada as low as three to five percent. With some clients in the US, we've seen sort of the eight to 12%. Then we've also seen the 20 to 25% cost of capital. And I think there's a lot that goes into that. Um, so you know, for some of the lower cost of capital examples, you know, the brand might be really well known, or you know, there already might be an established company. So there's a lot of credibility that goes within, you know, that sort of investment opportunity. You know, maybe they've got a historical returns and historical track records. So the offering is more appealing. And so you get a lot of campaign efficiencies when it comes to how much you need to actually spend to acquire investors for crowdfunds or for companies that are more startup driven and maybe lacking when it comes to product validation and they're still sort of testing the market. You know, there's a little bit more investor hesitation around that. So the costs associated with getting an investor might be a little bit more expensive. Long story short, the biggest cost driver though, to raising capital online is going to be your advertising direct costs. So it's gonna be the ad spend that goes directly to Meta, Google, LinkedIn, publishers, different channels that we're using to amplify the opportunity to potential investors. And it can really range anywhere from that as low as 3% if you're a really well-known brand all the way up to 25% cost of capital if you're, you know, a relatively new brand and you're trying to do like a crowdfund where you're getting a lot of different, a lot of smaller sized investments. One thing that I would mention is that um, you know, oftentimes people come to us wanting to hit their target raise as quickly as possible. And one thing that I would caution founders to think about is the quicker we do it, the more expensive it's actually going to be because you lose some cost efficiencies when it comes to scaling up your marketing budget. And that trickles down, you know, operationally as well. So the faster you do things, the quicker we have to drive interest. But then, you know, that limits room for, you know, campaign optimization, testing, you know, different rate of messaging, testing different channels. It just puts things, you know, into overdrive a little bit, but limits the ability to kind of identify what works. And the longer you longer time frame that you have to raise the capital, the more opportunity you have to be conservative with your budget and identify what is truly resonating with potential investors from a marketing message standpoint, from a channel standpoint. And then you can kind of double down on what's working and minimize how much you actually need to spend on marketing to raise the capital.

SPEAKER_01 9:23

Yeah, that's a good point. I wanted to chat with you about the first three months, which I feel like are always really critical. And if you accelerate your timelines a lot, those first three months can be a really inefficient use of your capital because the first three months are really about learning. And if you are accelerating your timelines, you're not necessarily accelerating the learnings because there's only so many learnings you can get through through launches. And so you might actually just be overpaying for the same amount of data that you would have got for spending half the budget or whatever. I think that's a good point about like not accelerating the timelines without an intention. But I did want to ask you about the first three months because one of the key considerations I would say with these types of raises is how quickly you can get to a break-even cost of capital in your marketing and be able to like pour that money back into marketing and get it a cash flow positive raise going. You know, starting off in that first three month period, I know we've been talking a lot about the different strategies to how we can approach that. So, what do you see as the optimal approach for your first three months in a raise and how you spend budget there?

SPEAKER_00 10:33

Yeah, that's a good question. Well, first off, getting started, there is a bit of a setup period where you're not actually in market with the campaign. So that can be anywhere from four to eight weeks, depending on the scope of the uh campaign. That's where we're kind of getting set up with the messaging, the market research, the funnel build, the video editing, all of those tactics. And then once we're actually in market, I would say having three months to hit a break-even point or you know, positive return on marketing spend would be the goal. Um, because you know, once you can achieve that, then the world's your oyster in a sense, in that you can kind of scale out what's working for the remainder of the fund. And so, really, the the first three months is critical because we want to get proof of concept with the Rays and we want to see that we're bringing more capital in than money being spent on marketing. In terms of like best practices, we want to get the core funnel launched. You know, there's lots of different tactics that we will eventually launch with clients, you know, whether it's webinars, whether it's in-person events, whether it's publisher promotions, whether it's influencer marketing, or looking at some third-party promotional platforms. But it's important to get the core funnel launched and activated because that's going to be sort of your evergreen strategy that's just bringing in investor interest on a continuous basis. And so the focus is really getting that live. And that will be your main funnel. So your main promotional channels, your main marketing message, your landing page, the infrastructure to allow people to easily invest. And then, you know, the automations after they become a lead to, you know, give them all the information they need to actually process an investment. So the core marketing infrastructure needs to be in place during that four to eight week sort of setup period. And then the uh three weeks to or the three months to really get proof of concept with that core funnel. In terms of budget, again, this is why it's super caution founders to want to raise the money super quickly. Sometimes people will want to raise it in three to six months. Well, that removes the testing period. So you're obviously not gonna get the efficiencies that you could get if you had 12 to 18 months. And you're gonna have to spend money a lot quicker on something that hasn't been validated yet and you don't actually know if it works yet. If you have 12 plus months, well, then you know, be conservative with the budget during those first three months so that we can test the messaging, so that we can test the channels, we can identify what works, so that we're not victims of wasted ad spend and we're we're able to then reinvest the capital that's coming in into strategies that we know produce a return, if that makes sense.

SPEAKER_01 13:15

Yeah, totally. There's a couple of interesting strategies that I've been coming across and approaches, I guess, in talking with founders. So, you know, if you want to have the really compressed timelines, your cost of capital is going to increase, like you mentioned, and you have less time to have a figure out how to get a higher return on ad spend. If you're doing a longer term raise, you're kind of optimizing for that return on ad spend more consistently and you want to have a more consistently higher return on ad spend throughout that period. So on a month-to-month basis, ideally your performance is actually gonna be higher throughout the 12 months than it would be on like a shorter six-month raise. An interesting strategy that I've come across and been talking with some founders about is if they can absorb a higher cost of capital, which in some instances they can because they have good margins or they're a fast growing startup. So they imagine that their valuation is going to increase significantly after this raise and they, you know, just want to get a raise done. They sometimes are, or maybe they're focused on investor acquisition because they want to diversify their investor base. That's another thing I've come across. Those raises are interesting because they actually are able to tolerate like a much higher cost of capital. We're talking like 40 to 50%, which some people think is insane, but it's actually not depending on your particular context. But the strategy there is actually interesting because you want to get to break even as soon as possible. And again, like you mentioned, it depends on the level of brand awareness that you have. Like, are you in the market for the first time? Do you have a following, et cetera? But you know, for us, most of the companies we're dealing with are actually like they're doing very well financially, but they're not super well known. I find that we're usually starting from the bottom. In terms of recognition, I think for them, it's actually about getting to positive return on ad spend as soon as possible, but again, could be within three months. Then they're gonna stay within like two to three times return on ad spend, maybe just over two, but try to get to that final month as quickly as possible and just convert at like a five to six in the in the final month. So they're actually okay compressing it because they can tolerate that higher cost of capital. But if you need to stay within a like 20% or lower cost of capital range, you want more time because you need that efficiency. So that's an instance I've come across where I've been able to accelerate but absorb the cost at the same time.

SPEAKER_00 15:29

Yeah, yeah. And to your point, like the end of a raise typically has the best return because there's a lot of urgency. Like, people don't want to miss out on the opportunity. You see a bunch of investors coming in. For some, you know, companies they're okay with, you know, working towards that final one to three months, you know. But the risk with that is obviously being okay with lower return or higher cost of capital for the majority of the raise. You know, that that's why I'm a big advocate of like obviously if you have more time, then you can kind of you know spread those returns, you know, across more a higher number of months. And, you know, there's different scenarios, right? Like some clients want to just raise the money and there actually gives them the validation they need to approach VCs or approach institutional investors. So it's not so much about the cost efficiency. So they just want to get the money in as quickly as possible. We have another client mentioned, Martin, that just wants to go on the Nasdaq. And so there's some like criteria that they need to hit in terms of numbered investors in order to be able to achieve that. So they'll do whatever it takes to kind of get to that threshold. So a lot of different situations.

SPEAKER_01 16:32

Was chatting with somebody on the real estate side, which uh we have found has a lower tolerance for a high cost of capital. Here's another instance where people can observe that or are willing to is, you know, they have a group of institutional investors that won't hop in until they reach like maybe a five or ten million dollar threshold of other funders in uh the project. So they might like, for example, really focus on getting to five to ten million and then they are have access to the lower cost of capital, institutional capital. So there's all these strategies that you you come across in the game and all these different purposes that people have behind the raise. So it's definitely not one size uh fits all. But um question I had for you was if somebody asks you like, what is my minimum viable marketing budget that I need, let's say they're talking for a raise in in in general. And the second, like the two part to that would be like on a monthly basis, how much do they need to spend to even get like a good proof of concept?

SPEAKER_00 17:30

If it's a crowdfund, you know, I'd like to set expectations that you should expect to spend around 20% of how much you're trying to raise. So if you're trying to raise 1.2 million, then 120,000 across the life of the raise. If you're trying to raise 10 million, then expect to spend 2 million in advertising dollars across the lifetime of the raise. Obviously, you're not cutting a check for 20% of how much you're looking to raise. Like that's spread across, you know, each month of the raise and it's scaled up. So the first few months are a lot more conservative. And the budget conversation is very collaborative. So it doesn't need to be a sticker shock. You know, we can actually see in real time how things are going, and then we can throttle up or down the budget as we see fit. Um, so that's a crowdfund. Just expect, you know, about 20% cost of capital for a Reg D 506C, something that's more focused on accredited investors, people that can write a higher check size. We see a lot more cost efficiencies with those types of funnels, I'd say, or those types of offerings. And so that can range, let's just say eight to 12%. And obviously it's going to be have a lower cost of capital if you have a better offering. If you have, if you've been around for longer, if you're an established company, if you have track record, historical returns that you can speak to, things like that. So those play a big role, but I'd say expect eight to 12% for a fund that's targeting accredited investors.

SPEAKER_01 18:50

I think you brought up a good point too, which was you're not cutting a check for 20% of the raise right at the beginning. So sometimes I'll talk with people and we're usually pretty upfront about pricing. So I'll be like, yeah, this is gonna be $500,000. And they're like, I don't have $500,000. Like, I'm there's no way I'm spending that at the beginning. And I'm like, yeah, you don't have to spend it all at the beginning. It's actually scaled in. And so, in terms of the actual flow of cash, you're really depending on how long it takes you to get to that break-even, you might only be in a negative cash flow balance for like a month or two, and then it's all cash flow balance. So that $500,000 that you spend on marketing might just come from an initial 50k investment that you put into the at the beginning of the raise. I think that's a a fairly big misconception as well, because people think they need to have $500,000 in the bank to take this on.

SPEAKER_00 19:38

Yeah, exactly. Like the the whole goal of those first three months is to get that positive free cash flow so that you're reinvesting that into the marketing budget. So you don't need the working capital on hand at all, to be honest. If you're using the capital that you have on hand for that 20%, then the thing's a failure. So yeah, it's kind of like an intimidating number to people, but you know, when we go through the budget plan and the forecast, then it makes sense, right? And it's such a continuous conversation, collaborative conversation every week in terms of how much we spent the previous week, how much cash came in, and then that can influence the budget for the subsequent week. So but it's more about setting expectations and and people, you know, understanding what it takes by the end of the raise, that's what you can expect. But it should be coming in from the investors that you're acquiring.

SPEAKER_01 20:25

Yeah, yeah, exactly. Maybe switching gears here just a little bit about avoiding cash burn mid-raise. This is actually also key because let's say obviously find yourself in a variety of situations, but you might also find yourself in a variety, like a situation where things are actually going well. And then the temptation from a marketing perspective is to kind of start trying all different types of stuff, for example. There's obviously a lot of focus you need to maintain to keep the your cash on hand and use it effectively. How are you guiding issuers to make sure that, you know, regardless of the situation, whether they need to up their efficiency or things are going well, how are you kind of keeping them on the tr on track to make sure they're not burning any cash throughout uh mid-race phase?

SPEAKER_00 21:08

Kind of going back to the previous conversation, it's a very collaborative conversation when it comes to budgets. And we're very prescriptive with, you know, the cash that's required to hit the the target. In terms of, you know, so there's a lot of transparency with that communication. So and there's meetings, right? So, you know, we're having the discussion and the feedback loop in terms of how things are going. So there's really no gap in terms of communication with, you know, the founder or or the client and us. And so, you know, as long as we're being very collaborative and and the people that we're working with, the companies that we're working with, will have a good understanding of how much capital is needed in order to continue moving the marketing campaigns forward. So I think in terms of cash burn, like the timelines play a role as well, like we already spoke about. For instance, if you want to say you have a Of investor relations staff that are taking meetings and you want to raise $10 million in six months, is one scenario versus scenario where you want to raise $10 million in 18 months, where you need to hire a lot more staff if you're going to do it in six months, because you need to front load and have more meeting capacity because you're trying to raise the same amount of money, take the same amount of meetings in six months versus scenario two, where you're taking the same amount of meetings and raising the same amount of money across 12 months. So you need half the staff. Just keeping founders on track when it comes to avoiding cash burden. That's just like we're very collaborative. We're we're always talking about and forecasting what's needed operationally to make this a success. So as long as the communication lines are like open, then you know we can make sure to avoid that. And then the other thing too is with a shorter raise, any errors will compound, for instance. So one uh there's two weeks where some of the ads that were previously performing start to underperform. And so now we need to create new ads. So during that time frame, maybe there's less meetings. Um, but you have eight IR reps on staff trying to figure out what to do, you know, with themselves. And then also if you're doing more meetings in one day, you know, there's likely some like inefficiencies that come with that or maybe missed opportunities because you're managing a lot. So there's a lot to think about, but I'm a big advocate for just, you know, having more time so that you know you can get those campaign efficiencies. You can spend less to raise more. And then also when it comes to cash burn, we just need to have like really good communication between us and our clients to make sure that we're on the same page with everything. Totally.

SPEAKER_01 23:49

So time is money, is what you're saying.

SPEAKER_00 23:51

Time is money, but more time is less money.

SPEAKER_01 23:54

Less time, less money.

SPEAKER_00 23:55

I mean, which is not it's not a bad thing, too. You know, we we can move quickly, but you know, you just lose the opportunity to optimize, to tweak things, to refine the process. Some people want to raise the money quickly, and they're okay to sacrifice the cost of capital because they want to get more investors in, and that's fine too.

SPEAKER_01 24:14

That's a lot of really good points there. I like that you're talking about the like the other cost considerations in in a particular strategy. Like second and third order costs are important to consider. Another thing that can also happen from like a founder perspective is like like, especially in marketing and media, is shiny object syndrome because marketers do a really good job of hyping up certain tools and getting people enthusiastic about them. And so sometimes it's tempting to want to spend in certain channels, but they might have a fairly poor track record. So it's important to also, when making media investments, focus on channels that have the highest probability of return and uh the trackability of that return is also really important. So there's a lot of shiny objects in terms of media, but when thinking of what to invest in, it's what's the track record, what's the trackability of those uh potential channels is important as well.

SPEAKER_00 25:12

Yeah, there's uh a lot of assumptions in terms of where a founder may think their investors are, like, you know, whether it's like LinkedIn, for instance, can be a more expensive platform when it comes to the marketing metric. So there's just different, you know, benefits and disadvantages of different tools. And yeah, it doesn't make sense to invest in something because there's an assumption that it's got the right audience when there's a tool over here that just is a lot more efficient from a campaign spending standpoint and also historically can drive better results.

SPEAKER_01 25:42

My personal experience, I always say that LinkedIn always works in theory, but never in practice. Uh, because it's just it always sounds like it makes the most sense, but it just converts so expensively. At least that's what I've always found.

SPEAKER_00 25:56

Yeah, yeah, exactly. And, you know, but it can be used, I guess, you know, for other means, like, you know, it's a good tool to promote webinars, for instance. If you want to get a different audience to, you know, engage with some sort of content that you're putting out there. But when it comes to scalability, I wouldn't say it's the best tool.

SPEAKER_01 26:15

Well, um, you know, now that we've gone through why this is so expensive, and maybe we'll we'll talk a little bit about why do people do this then, if uh, you know, given the costs, um, because there's also some like I've personally found like once people can make this work, like they love it. They don't want to raise capital any other way. Maybe we could talk a little bit about some of the reasons, like why invest all the money into this, why do it? You know, one of the I I can start us off just in terms of an observation. Sometimes it's purely out of necessity. Some founders or companies might actually be having trouble raising for more traditional roots, but find that there's quite an appetite in the private markets. Example might be that they've, you know, gotten rejected from the VC crowd or the VCs are just kind of asking way too much in terms of um like concessions, board seats, control, et cetera. And so they'll go outside of it and find out that there's an appetite for others to fund it, you know, from the long tail perspective, if they're doing like the the retail CF raise. So one is like I find out of necessity, sometimes people do it and it's actually effective. So that's one point. Any thoughts on why you see people doing this uh style of raise, like, you know, just kind of given the the cost associated with starting out?

SPEAKER_00 27:25

There's a lot of different reasons. I think one, there's something nice in having access to a consistent inflow of capital for your company and your growth. You know, doing this from a marketing approach, that's what it is. Like we're creating a system that constantly drives you investors and constantly brings you capital that you can then, you know, spend on growing your company or whatever you need operationally. That's nice, right? So you don't have to kind of go through these like VC pitching sprints every six or 12 months to get the cash that you need to create more runway to get your business to the next level. You'll just benefit from a consistent inflow, influx of capital. There's other different reasons, like sometimes companies want to raise money from institutional investors. I think I kind of alluded to this earlier, but those institutional investors won't give them the time of day until, you know, unless they've already seen some proof of concept with like they're getting investors from other areas from other sources, because that is sort of the validation that these institutional investors would need in order to actually consider an opportunity. And so it can be a stepping stone for some of those bigger raises, like a series B or C, you know, raising hundreds of millions of dollars. That's not really going to happen if you're not kind of, you know, at a certain threshold. VCs can oftentimes offer unfavorable terms and so and take control over your company. Or, you know, those are difficult negotiations. And from what I've heard, you know, that's that's a stressful endeavor for founders, you know, trying to find VCs, trying to find good VC partners, and then also trying not to get ripped off by, you know, the VC firms that are actually investing in your company. Um, some founders aren't their background, they're on the finance side of things. So you see Dragon's Den and everything. And so, you know, sometimes people give away 50% of their company and they don't really understand the implications of that. You maintain control with this approach, I'd say. There's also other reasons too, right? Like you're spending money on marketing. So I think that's a dual purpose. Like you're actually promoting your company. Like most companies have a marketing budget, anyways. And so you're actually spending money promoting your company, which you might be doing anyways, but you're also driving investors, but you might be driving customers as well. Like we've had some clients that have apps, for instance. You know, they're promoting investing in the app. But then everyone that's considering on investing in the app is gonna download the app and become a user. And so they're actually getting user acquisition as well. So there's a lot of different reasons, but to be honest, I really think this is, you know, a nice approach to raising capital because there's just a lot of predictability and you don't have to deal with or worry about unfavorable terms when you're trying to raise capital.

SPEAKER_01 30:14

That's such a good point. I think that you nailed it uh on the head there, and that's a big reason why we see a lot of people choosing this method. So if you were to leave you know our listeners with a piece of advice when it comes to you know the costs around uh raising capital, this particular method, what would you what would you leave them with?

SPEAKER_00 30:33

Be open-minded, like you know, have the conversation, take a look at what the actual budgeting sheet looks like and understand that you know you're not cutting a check for eight to 20% of how much you're looking to raise. It's very um scaled and that's built into the the plan. And and really, like you said, Martin, you're not going out of pocket actually that much because you're the investors that you're getting from the system are, you know, those investment dollars are being reinvested into the marketing. Um, so yeah, but uh, I'd say that's like a piece of advice. Be open-minded. And and then obviously I'm a big uh advocate for the timeline side of things. So understand that, you know, the more time that you can allocate to this, the more effective it's likely gonna be and the more, the less expensive it's gonna be in the long run.

SPEAKER_01 31:22

Yeah, that's perfect. I'm gonna I think double down on uh what you were saying in terms of the beginning and and how founders actually aren't out of pocket for the entire marketing budget. And so I would say the planning your finances around those first three months is really critical and trying to get to that break-even as soon as possible. So if you as a founder can really understand how the cash flow works within those first three months and the strategy to get to beyond breakeven, you're gonna really have a good grip on how you can scale out your capital raise using this method. So that's what I would leave as my piece of advice. But I think we covered a lot today uh in terms of this episode. So it seems like a good time to to sign off for today. So on that note, I will say goodbye to the listeners and uh thanks for all the input today, Brendan. Thanks, Martin. All right, so yeah, bye-bye.