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| Mar 01, 2006 6:14 pm |
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re: Which Bootstrapping method makes the most sense? |
| James Griffin Media
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Okay, as I've gone through some similar obstacles with a previous startup, seen my friends experience similar things with their startups and I'm now experiencing similar issues again, please let me share some very 'tough love' with you.
The issue boils down to this -- Keep things simple and do whatever you can control and effect today. Forget about 'investors', 'VC's' and all these big deals or dreams. A complete waste of time in my opinion.
*** See Below For My Detailed Analysis ***
>Options To Consider:
>===================================
>1) Approach a particular European company that has core
>2) Find a couple other engineers willing to work for >equity.
Summary answer: NO WAY!
This could work, but, as you say you risk making a big competitor! That alone would scare me. Why risk it? Why tip them off?
Secondly, you first have to get the company to sign on, agree to join with you, work out the deal, etc. -- months of effort, scattered attention and wasted time.
And for what? To maybe make some little money or get in front of customers for future sales?
Forget it! The ROI on that deal and downsides say 'two thumbs down!'
If you want to do that, go sell your plan to prospective clients and try to get them to prepay, invest, buy your service, etc. and fund it that way
Or get a full time job and invest money from that. I'm serious and more about this later.
>2) Find another engineer
>
Summary answer: NO WAY!
This could work but it also is very 'iffy'. You may be wasting your valuable time, energy and money here.
Instead, focus either on getting paying customers or working full time/consulting for others to generate hard cash to buy what you need and spend more time working with your current engineer.
>3) Raise either angel or VC money to fund my plan.
>
Summary answer: NO WAY!
Forget this -- it's a waste of time. I'm sure you have a great plan and idea but why invest your valuable time in something over which you have no control? Forget it!
You are better than that. Endless dog 'n pony shows,
listening to babbling VCs blather on all so you can wait 4 to 8 months at best to get some money if you even get it at all!? Also, remember you will get the money so late, it won't even help much -- instead focus on organic revenue, customer pre-pays, development, etc.
At some point, yes, you may get funding, need it or be ready, but don't waste time now.
Now, there is always the chance you will get funded. If you want to try that, here's what you do. Create a two page executive summary. That's it.
And contact or send it to some VCs/angels. If they want to discuss, great, then make a 5 page power point slideshow. If not, you didn't waste any time.
I have a friend working on a product similar to my concept in the dating space who has spent almost $10,000 on his plan in hard case and wasted time. He has not met with one VC yet.
The dirty secret of the VC is this -- if they don't like your exec summary, it doesn't matter how great you are or how great opportunity is, etc. You are out.
On the other hand, if you have a great exec summary, you can get in and then each step of the way, create the rest.
If they really like you, they will work with you and say, 'hey we like you exec summary let's meet'. And then you bring a small powerpoint and meet. And create each piece before the meeting. That way you hedge your time.
The downside is it's still a waste of time meeting with these guys,etc, etc. and you risk them stealing your idea or giving it to their friends, associates, etc.
>4) Get Full time job (and stop the consulting),
>
Summary answer: YES!
You are in complete control here. You are the investor in your own company. It's hard, it's tough but each day every effort you make, every dollar you invest moves the company forward!
Okay and now I add this option:
(5): Find a customer now and try to prepay/pre-sell your services.
Why not do this? See if you can pitch customers to buy now! And if you do this with getting full time job/concentrating on it, you are set and you can fund it that way.
And buy the way, it sounds like you've already written the product spec, marketing plan, biz plan, etc. If so, you have all you need. Just work with your engineer and earn money from a job to plow back into your company and when you feel you have extra time pick up the phone and meet with prospects and try to sell them.
These are just my thoughts. I hope you find them helpful.
---- JamesPrivate Reply to James Griffin Media (new win) |
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