The decision to raise equity capital would be made based on these criteria:
(a) Size of your market: Is it a big market, meaning you have a chance to hit $100M in revenue in 5-8 years?
(b) What is your YoY growth rate?
(c) Will infusion of equity capital help you greatly accelerate your YoY growth rate?

Happy to discuss further if you'd like to.

Hi there! I'd recommend focusing on gaining more customers and generating funding through additional revenue from customers rather than going after investment.

To provide you context to my answer, I'm an active angel investor investing in early-stage tech companies and an entrepreneur who has raised funding and formerly a VC associate for a $500m fund.

This answer has the potential to frustrate you but without understanding the details of your business, it's almost impossible to provide anything than a very general statement around funding.

So here goes:
Amongst experienced tech investors, revenue can actually hinder your ability to raise expansion capital. The evaluation of a business like yours is no longer "does the concept have potential" to "how big and how fast can this business become?" Despite how difficult it is to do what you've managed to do (congrats by the way), the question is now entirely on how efficient your customer acquisition is and what the real life-time value of a customer is.

That a local business association promoted it to its members is good for you but what are the optics of this deal? In other words, if this was the primary way you acquired customers, how efficiently could this scale?

So in order to raise investment from sophisticated tech investors, you will likely have to work and help create a narrative and provide the evidence that you can go from being a great bootstrapped business for yourself and a few others to a business that has the capability of generating a 10x return at the valuation you bring in new investment at.

There are other options as well that may be less daunting but without knowing more about you and your business it's impossible to give any more useful details than above. I'd be happy to do a call to give you more detailed help.

Congrats on your success to date!

+1 to Tom Williams answer.

As with anything, there are pros and cons. The pros are obvious:
- access to a lot more money to help you scale, hire and acquire more customers
- someone who can open doors and make key introductions for you (smart money). Who you raise from is often a lot more important than how much you raise.
- more credibility when dealing with journalists, potential customers or partners, and in convincing rockstar employees to join your company

The cons:
- Loss of control (although this isn't usually as bad as it's made out if your interests are aligned - ie an exit in 3-5 years)
- Raising money is time-consuming and distracting. It can often take 6 months, and it's a full-time job the whole time. What is the opportunity cost of those 6 months? Would you be better off spending that time finding more customers?

Without knowing the specifics of your business it's hard to offer any tailored advice. Some businesses have a long path to revenue because they have to build massive scale before they can monetise. Other businesses are in a new industry, where it's a landgrab situation, and they need to raise money to dominate the space before their competitors do.

On the other hand, if you're in a mature market with lots of competitors and already have enough paying customers to be cash flow positive, sometimes raising investment is not that helpful at all.

I have 25 years of experience working with early stage technology companies and investors.

I’m often asked about fundraising strategies for VC funds and angel investors. After raising capital and exiting from multiple startups and investing through 15 venture funds and dozens of angel investments I have seen thousands of deals.

Since you are already generating some initial revenue, it sounds like it is the right time to put together a plan to raise your seed round of capital.

I’ve found that the most productive use of time for both of us is scheduling a call through my profile.