Insufficient funds.

[parkerscott]

So I came up with a new idea the other day, and due to my last project im short on funds. I will need about 15 grand to develop it, and some more for the marketing. The problem though is that I don't have 15 grand, and if I wait to save up all that money the opportunity may not be there anymore.
The market is worth hundreds of billions a year, and theres very little competition. I also meet a need that hasnt been met. Its easy to scale, and doesnt take much of my time.

Im at a bit of a crossroads now that I don't have the money. What would you do in this situation? Would you try raising the money working? Would you borrow money from family? Bring on a partner? Find an investor? Or just take on a ton of personal debt?

So far im looking at personal debt. I have a credit score above 750, and im thinking of applying for a ton of interest free cards. The plan is to pay them all off before the interest period. Im aware that its very risky as well. Any suggestions?

 

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[Hope]

(Owing) debt is the root of all depression...

At least for me it is, I never owe debt to anyone, If I were you I'd just focus on bootstrapping, hustling to get the money needed, or maybe investors.

I'm in the same situation you are, trying to get some decent funding, although I need quite a bit more then 15k.

Good luck!

 

[tafy]

borrow it from whover you can, at no more than 5-6%

 

[parkerscott]

(Owing) debt is the root of all depression...

At least for me it is, I never owe debt to anyone, If I were you I'd just focus on bootstrapping, hustling to get the money needed, or maybe investors.

I'm in the same situation you are, trying to get some decent funding, although I need quite a bit more then 15k.

Good luck!

Yeah my other venture needs about 100k. I think this one has way way more potential, and its cheaper. I hate owing, but I think 15k is something I could bounce back from even If I didnt make a dime.

 

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[parkerscott]

borrow it from whover you can, at no more than 5-6%

So borrow from friends or the bank at 5-6% interest?

 

[GuestUser113]

https://www.thefastlaneforum.com/co...arch-22nd-zen*******.45392/page-5#post-272579

 

[biophase]

So I came up with a new idea the other day, and due to my last project im short on funds. I will need about 15 grand to develop it, and some more for the marketing. The problem though is that I don't have 15 grand, and if I wait to save up all that money the opportunity may not be there anymore.
The market is worth hundreds of billions a year, and theres very little competition. I also meet a need that hasnt been met. Its easy to scale, and doesnt take much of my time.

I never understood these issues if all your facts are true. It's a no brainer to put all $15,000 on your credit card IF... It's truly a multi-billion dollar market AND there is no competition AND it meets a new need AND it's easy to scale. But something tells me that everything you said is not true, because if it is you would not be asking this question.

When I'm putting money into something and I go through these calculations it's always a very easy answer. But you need to be honest with yourself. When I import a new product I already know my risk:

What if I can't sell my product at the price I expect? Then I lower the price? Still not selling? Wholesale it in lots? Still can't do that? Sell it at my cost on ebay or craigslist. Can't sell it that way? Sell it at 1/2 of what I paid? Still not selling? Toss it.

Those are my options, but realistically because I know my market. My real worst case scenario is sell it at cost on ebay or craigslist.

 

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[Yury]

hundreds of billions a year, and theres very little competition

Ok so there's billions hundreds of billions on the table yet hardly any competition... wow.
And the entry ticket costs 15k and the entry barriers are rather low so you can just jump into it?

Man I really hope you'll succeed with it and all, just it kind of sounds a bit too good to be true...

Of course it can be that easy (maybe you've noticed the unmet need that appeared due to technological changes etc, why not), but before you jump into the debt etc please please make sure that you're not missing some "fineprint" like that one https://www.thefastlaneforum.com/community/threads/how-i-lost-550-to-google.53043/ as I figure that if you weren't happy with losing $550, losing $15k would be even less pleasant.

Having said that, of course I don't say "hey don't to this" as I don't know any details and anyway it's up to you to assess and execute, just please be careful. Maybe it would be a good idea to try and figure out if you could validate your plan first (with mock-ups or whatever, depends on the industry). as seen in some good threads on this very forum.

What would you do in this situation?

Well with a validated idea of providing solution for an unmet need at a huge market (and if you can provide this solution) you shouldn't have much trouble raising these 15k from the 3F (family, friends, fools) or an angel. I figure a half-page brief would be enough to get you overbooked, on your terms.

 

[Unknown]

This seems like the high of finding a new idea. This is usually followed by the bleeding of money. The next phase usually involves imagining all of the money you'll be raking in. The next phase is when you realize that maybe the idea wasn't so great, but then you talk yourself into believing you just need to get the message out. Then you borrow some more money to advertise, because that will fix it for sure. This is followed up by fretting, because now you owe everyone around you money and you've made $27 so far. The last phase involves taking on a second job to pay back the debt you took on....

Ok so maybe a bit dramatic, but don't just jump into an idea that requires $15,000 when you just said that you're short on funds from your last project. Weren't you extremely excited about your last project? Wasn't it the big project that was going to make you a millionaire? Go back and take an honest look at your previous projects, and I bet you'll find that you need to move slower and stop worrying about the opportunities passing you by.

This isn't meant to be a judgement. I mean I bought a freaking trademark for a name on a product I hadn't even properly validated. $300 down the drain as far as I'm concerned, but you have to learn from those mistakes and move forward. I'd just rather not see you learn from a $15k mistake.

 

[parkerscott]

Its not that new idea high like I had last time. My previous idea was exclusive to the fitness industry, and there were already tons of competitors. The mold costs were insanely high, and I think the product I had is more novelty now that I look at it.

Now im able to look at it from a different perspective and examine it. There is not a niche this time around, and people dont have any other options to choose from. The startup costs are very low, and the scalability is huge and its a worldwide market and i dont have to worry about wholesalling like the last project.

All of it seems good except for one problem. In order for it to work I need tons of people on board, and I need engagement. That is the only thing holding me back at this point. If it doesnt work out at all, I will be in debt. If it somewhat works out I will make some passive money. If it has a viral effect though, I wouldnt have to work ever again.

Also yury that 550$ stung because it was something I hadnt even considered. In any business I go in knowing I may never see that money again.

 

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[biophase]

Its not that new idea high like I had last time. My previous idea was exclusive to the fitness industry, and there were already tons of competitors. The mold costs were insanely high, and I think the product I had is more novelty now that I look at it.

Now im able to look at it from a different perspective and examine it. There is not a niche this time around, and people dont have any other options to choose from. The startup costs are very low, and the scalability is huge and its a worldwide market and i dont have to worry about wholesalling like the last project.

All of it seems good except for one problem. In order for it to work I need tons of people on board, and I need engagement. That is the only thing holding me back at this point. If it doesnt work out at all, I will be in debt. If it somewhat works out I will make some passive money. If it has a viral effect though, I wouldnt have to work ever again.

Also yury that 550$ stung because it was something I hadnt even considered. In any business I go in knowing I may never see that money again.

So it sounds like this idea is more about your ability to market it. That is what you need to weigh your $15k against.

 

[parkerscott]

So it sounds like this idea is more about your ability to market it. That is what you need to weigh your $15k against.

Exactly!! The price to acquire each person would have to be very low as well, and the conversions would have to be pretty high. Its one of those things that would need a viral effect to be really successful. I think I will do some more validation just to get an even better idea.

 

[Kyle Tully]

All of it seems good except for one problem. In order for it to work I need tons of people on board, and I need engagement. That is the only thing holding me back at this point. If it doesnt work out at all, I will be in debt. If it somewhat works out I will make some passive money. If it has a viral effect though, I wouldnt have to work ever again.

Sounds like you're day dreaming.

What's your plan for this "viral engagement" (there's a red flag if I ever saw one) you need so dearly?

 

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[Yury]

I need tons of people on board, and I need engagement

Not the same btw. From my own experience, there can be lot of people but low engagement per person (example: high general interest but not such high desire to dive deeper -- or too many alternatives to settle at just one) and vice versa (example: most of people who get there get engaged, but for different reason they don't spread or even prefer not to spread the word; google ad words etc helps in some such cases btw, so did they ban you after that dispute?).

So "I just need it to go viral" might sound easy as you read about it everyday in news and blogs etc, but please don't flush the money there before you've validated the engagement and the virality with some prototypes or whatever

I think I will do some more validation just to get an even better idea

thumbs up

 

[parkerscott]

Sounds like you're day dreaming.

What's your plan for this "viral engagement" (there's a red flag if I ever saw one) you need so dearly?

Viral engagement is only needed if im set on acquisition. Im just set on getting users. Its free, it provides value, its new and controversial, its easy to use etc etc.

 

[randomnumber314]

You're going to sneeze and blow through that $15k if you don't have any experience.

Listen, the one person I know who successfully built a web company that does over $50 million start with $2mil. I don't know what your skillset is, but if you can't build it, market it, and the other 1,001 things that will need to be done, you're going to be broke, quick.

Discuss the idea you have with family, friends, people with money. Don't defend your idea if it keeps getting criticized (that's your market correcting your business idea) eventually you'll have a good plan to provide something people find valuable. THEN you start talking about how much money you need. And $15k aint it if you've never built a company from the ground up.

 

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[DennisD]

If you can get the 15K in preorders or advanced funding you don't need to raise anything, you down' owe anybody anything, you don't have to worry about giving up equity or debt

 

[BlakeIC]

Very good inputs in the thread

Op if you really wanted to you could bootstrap 15k in a month buying/reselling craigslist items onto amazon and ebay and reselling locally

Here is a thread that I feel could help
https://www.thefastlaneforum.com/co...ing-cash-when-needed.43153/page-2#post-385143

There is so very good information in there
There is also a post in there by zen that he linked it is very good


EDIT: Well you could bootstrap 15k in a month if you had all the time to yourself
Probably less, I wouldn't know

 

[jilla82]

You have to think of a business that you can start quickly and cheaply.

I have an idea for something, but I dont want to blow my wad on it.
So im coming up with separate ideas that can get me the start up capital in the next 6 months.
4th quarter is approaching...tons of opportunities.

if you think you cant wait 6months to start this idea...then it probably wont work anyway.

 

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[parkerscott]

You're going to sneeze and blow through that $15k if you don't have any experience.

Listen, the one person I know who successfully built a web company that does over $50 million start with $2mil. I don't know what your skillset is, but if you can't build it, market it, and the other 1,001 things that will need to be done, you're going to be broke, quick.

Discuss the idea you have with family, friends, people with money. Don't defend your idea if it keeps getting criticized (that's your market correcting your business idea) eventually you'll have a good plan to provide something people find valuable. THEN you start talking about how much money you need. And $15k aint it if you've never built a company from the ground up.

Ive sneezed through 6k on a previous venture. I have already talked to my friend who is a developer. He told me he can have it out the door for 15k. My largest pitfall is marketing. I dont have to store product anywhere. I wont need servers, or a tech squad. I dont have to implement a complex billing system etc, etc. The idea is extremely simple. Yes some web companies do require a lot of capital, but im missing a lot of things that web companies typically require.

Im going to run a few more tests for validation as well.

Also thanks everyone in this thread for the replies so far.

 

[youngtrep]

Exactly!! The price to acquire each person would have to be very low as well, and the conversions would have to be pretty high. Its one of those things that would need a viral effect to be really successful. I think I will do some more validation just to get an even better idea.

Be very careful with this. It is easy now to say "well if I can only get a few thousand users this will really take off". Getting 50 users is difficult let alone 100x that. I have had that line of thinking and allowed myself to just assume things would work out because I wanted to dive in so quickly. Of course in the end, those acquisition costs weren't cheap and the conversions weren't high. I say plan for the worst case scenario, not the absolute best.

 

[parkerscott]

Be very careful with this. It is easy now to say "well if I can only get a few thousand users this will really take off". Getting 50 users is difficult let alone 100x that. I have had that line of thinking and allowed myself to just assume things would work out because I wanted to dive in so quickly. Of course in the end, those acquisition costs weren't cheap and the conversions weren't high. I say plan for the worst case scenario, not the absolute best.

Ive already planned for the worst case. Thats why im asking how I should gather the funds 15k will hurt pretty bad. 15k at 24% apr would hurt even worse.

 

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[biophase]

Ive sneezed through 6k on a previous venture.

I have already talked to my friend who is a developer. He told me he can have it out the door for 15k.

Yeah my other venture needs about 100k.

Something's not right here. I don't know what kind of ideas you keep getting, but you talk about startup money like it's just something everyone needs. To put it in perspective I have started 5 businesses and have spent under $500 in starting each one. It seems like you get an idea and then just think that start up money is the key when it is actually a very small part of whether or not you are successful.

My current start up is about to go live (in 2 days) and I've spent under $500 ($183 to be exact) and I'm shooting for $200k/yr within 2 years. I don't even know what I would do with $6k to spend on a start up, let alone $15k or $100k.

Maybe you should step back and think of how to accomplish your ideas without large amounts of money.

 

[vinylawesome]

I am not sure what your idea is but could you possibly pre-sell the app like DennisDuty suggested?


For instance kickstarter seems to take a lot of pre-orders for consumer oriented apps.

The AirBNB squatter, Maksym Pashanin, Successfully pre-funded an app on Kickstarter:

https://www.kickstarter.com/projects/829559023/confederate-express

 

[Hope]

Something's not right here. I don't know what kind of ideas you keep getting, but you talk about startup money like it's just something everyone needs. To put it in perspective I have started 5 businesses and have spent under $500 in starting each one. It seems like you get an idea and then just think that start up money is the key when it is actually a very small part of whether or not you are successful.

My current start up is about to go live (in 2 days) and I've spent under $500 ($183 to be exact) and I'm shooting for $200k/yr within 2 years. I don't even know what I would do with $6k to spend on a start up, let alone $15k or $100k.

Bloody hell Biophase, that's insanely impressive if you can pull it off, I need your kinda' experience.

knowledge is power (and potentially money!)

 

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[biophase]

Bloody hell Biophase, that's insanely impressive if you can pull it off, I need your kinda' experience.

knowledge is power (and potentially money!)

I know I suck at marketing and social networking so I never start things like apps or software. I just stick with what I know and start simple businesses.

I've come across some needs in the software space but I steer clear of them. I think I'd bleed money if I hired a developer to make me software.

 

[BlokeInProgress]

@parkerscott will you need the $15k to be able to test your idea/project? Will you be able to test the demand without spending that much?

 

[randomnumber314]

I don't even know what I would do with $6k to spend on a start up, let alone $15k or $100k.

I get your point, but for most businesses there are some initial capital expenses.

 

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[tafy]

Most businesses need capital to start, unless your in services or information.

 

[Spacecake]

The market is worth hundreds of billions a year, and theres very little competition. I also meet a need that hasnt been met. Its easy to scale, and doesnt take much of my time.

If I'm sure the market is worth that much (BILLIONS), and I have confidence in what I'm offering, a 24% APR won't hurt tbh.