| 4:46 pm on Jan 3, 2007 (gmt 0)|
The first thing you have to do is change your mindset.
You are not trying to get funding for a SITE, you are trying to get funding for your BUSINESS. As such, you need to have a sound business plan outlining how your BUSINESS is going to make money in the future and how VC (or other) funding is going to help you achieve that.
If all you do is talk about your site, you show the prospective VC that all your eggs are in one basket, that you don't have an overall picture about developing it as a business, and that you are stuck in a 1998 mindset of build a website and the money will just come by itself.
If your website is not making (much) money, and especially if it's not even finished yet, you need a detailed plan for how it's going to make money and why it's going to be better than the thousands of other sites out there doing pretty much the same thing. And if you have the premise that your site is not the same as everything else, you'd better be able to back up your assertion about why it is different AND better.
If it's already making money, then you need to explain how the VC money will take you to the next level.
Remember that VCs do not "give" money out of generosity. They invest in businesses expecting to get a high rate of return. Before they invest in you, you have to convince them that you are going to make them more money than if they invest their money somewhere else.
| 5:31 pm on Jan 3, 2007 (gmt 0)|
I've always wondered , how did, ebay, yahoo, and google pay for the early periods ,
I guess i should search for auto-biographies, does anyone know off any for people involved in starting up those businesses
| 5:35 pm on Jan 3, 2007 (gmt 0)|
"I've always wondered , how did, ebay, yahoo, and google pay for the early periods"
ebay and Yahoo were early on the net. eBay was started to allow people to trade/sell PEZ dispensers. That grew and grew into what we see today.
Google was a couple of grad students who worked on a better search engine. They started with "small" queries of 50000 sites on regular computers and optimized from there. They probably used that to show to investors to get funding to ramp up their scans, storage, and bandwidth.
| 7:52 pm on Jan 3, 2007 (gmt 0)|
|I've always wondered , how did, ebay, yahoo, and google pay for the early periods |
google received some cash from ebay early on and someone will correct me if I'm wrong on this but didn't sequoia capital have a small investment in google during the early days too?
Oh, there are some good VC Blogs out there too gorilla_bob. Have you looked at any of those?
[edited by: Easy_Coder at 7:53 pm (utc) on Jan. 3, 2007]
| 8:01 pm on Jan 3, 2007 (gmt 0)|
sequoia Funded Both Google and You Tube.
| 8:06 pm on Jan 3, 2007 (gmt 0)|
Ok, I had some serious several year old cobwebs on that regarding google and sequoia. I have a vague memory that Stanford ponied up something too?
| 12:09 am on Jan 5, 2007 (gmt 0)|
wen through a few rounds of VC funding with a tech startup about 4 years ago and i can say this based ont hat experience: Avoid it at all costs. Seek out family and friends, look into small business loans, check with your local bank, research government grants. Basically, make VC money your absolute last option.
If you live near a big city, seek out a young entrepreneurs club, or something to that effect. Become involved in your local chamber of commerce. Basically network the crap out of yourself and your biz. There are many, many ways to get funding aside from VC and Angels.
VC money is VERY difficult to get these days, especially in the Web and Tech sectors. And they WILL expect a HUGE return on their investment. Unless you have a fantastic exit strategy and then execute it flawlessly, i would stay away from VC money.
oh, and dont use your own personal credit cards to fund the biz. Keep everything separate in terms of personal and business. If the biz goes belly up, the last thing you want is to lose evrything personal that you have.
| 10:10 am on Jan 10, 2007 (gmt 0)|
>Avoid it at all costs.
Yeah....I agree 100%
I've never been tempted to try it.....IMHO if the business is good, the last thing you need is investors....you might simply need a little more time, or a little more hard work, or a little more clever advice......Investors....no, they would be a pain to deal with!
Gate's did it on a shoestring budget......you can too!
| 11:42 am on Jan 10, 2007 (gmt 0)|
|Gate's did it on a shoestring budget. |
Gates did it on a little seed money from Dad ( which was still more than most members of the worlds population or even an average member of the USA's population could afford to give their kid ..) ..and he grew because everyone knew that Dad was good for more where that came from ..
Stanfords main contribution to google was that most sites didn't object to their bandwidth being used by something running ostensibly from an University ..and the University's status let them begin early with their "cache" function not being disputed ..as copyright laws give much more scope to Universities to store copies of the intellectual property of others for educational use ..
When they went entirely private , severed their official academic connections and went off campus ..they conveniently forgot to drop the "cache" ..and so now all the search engines are doing it .
edit reason ..typo
[edited by: Leosghost at 11:44 am (utc) on Jan. 10, 2007]
| 3:40 pm on Jan 10, 2007 (gmt 0)|
eBay and others were on the web much earlier when all of this was still a novelty and everyone was on the hunt for the next "Microsoft" and thought that by investing in any tech company they would get rich as the early investors in MS did.
I used to work for a dot com back in the day and we had venture funding that I help raise. I don't think I could do it today. VCs are much more weary of tech projects and they will demand a much greater ownership and control even if you can get them to lend, which would be doubtful.
I would recommend you bootstrap it. It is not as glamorous or easy, but if you borrow very carefully and fund only absolute bare essentials you can bootstrap successfully.
|oh, and dont use your own personal credit cards to fund the biz. Keep everything separate in terms of personal and business. If the biz goes belly up, the last thing you want is to lose evrything personal that you have. |
While you need to keep this separate for the purposes of taxes and bookkeeping it is almost impossible to keep them separate for the purposes of funding. I have two businesses and both have credit cards in the name of the business and one has a commercial line of credit from a bank. Both are incorporated and both have complete financial statements for 3 years and proven revenue growth and profits.
I had to personally sign for liability on all of the credit. I tried to object, but I was told flat out if I didn't take personal responsibility for them I wasn't getting it, period. I tried multiple banks with the same results.
Banks and lenders pretty much want you to put your neck on the line for a business. They figure, probably rightly so, if you don't believe in it enough to put your own stuff at risk than why should they.
| 6:43 am on Jan 21, 2007 (gmt 0)|
Actually, when I was in law school, my banking law professor would consistently say the whole of banking law can easily be summed up as "the bank never loses."
| 7:31 pm on Jan 21, 2007 (gmt 0)|
Well said and quite true.