The Process of Finding Investors

[GoneAt24]

First time entrepreneur / Web Startup / Have a problem worth solving. (Involving social media) / Have a prototype marked up in HTML,CSS, and a bit of JS / Solo Founder with no wish to bring on a founding partner / No product in the marketplace yet (Looking for seed financing) / Need $347,000 to reach Product-Market Fit


What would you guys say could be the next step in meeting investors? (Particularly angels.) Getting intros?


Does anyone have experience going through a lawyer to get an intro?


Thank you for your feedback!

 

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[johnp]

If this is a webstartup then why do you need so much money to get started? $347,000 to reach Product-Market Fit seems like a lot of money for a webstartup.

I read somewhere (maybe the Learn Startup) that Groupon started as a blog. Do you have to have a perfect product? If it's a website then no.

 

[GoneAt24]

If this is a webstartup then why do you need so much money to get started?

The bulk of it is for engineer salaries. I don't know back end coding. Of course finding a co-founder with that skill set would help, but the equity tradeoff would be - probably - close if not equal to 50%. Raising seed funding, the tradeoff wouldn't be as steep.

Believe me, I've explored the option of building a minimum viable product. In my specific circumstance it wouldn't be profitable.

Thanks though! I love to soak in different points of views.

 

[snowbank]

step 1: copy/paste generic 'how to find money' post in a bunch of forums and don't include any info

 

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[johnp]

I'm not all about the MVP. I love the concept, esp for B2B....But I like to get a little more out there than just an MVP. So i get what you are saying.

My Advice - You might not need the amount that you are looking for, even if your idea is extremely complex. There are a lot of different ways to go about it without doing an hardcore MVP.

Do you already have your engineers lined up or something? That is still a ton of money. How much are you paying them? How long is it going to take them to build it?

There are people, even in the US who can get a complex project done even for a fair price. You just have to stick your neck out there and find them.

 

[GoneAt24]

step 1: copy/paste generic 'how to find money' post in a bunch of forums and don't include any info

... Have I broken some kind of forum loyalty rule? I'm only trying to take advantage of as many resources as I can. I thought the the information I gave was sufficient for an intelligent answer. Maybe I was wrong. What other information is necessary?

 

[GoneAt24]

Do you already have your engineers lined up or something? That is still a ton of money. How much are you paying them? How long is it going to take them to build it?

I don't have them lined up, but the money would be for the initial build, and then to pay them just below market rate salaries for the estimated 5 months it would take to get the product market ready while we test it on a limited amount of users.

Even if I skimmed some expenses off the top, though, my issue is that I still wouldn't know where to start connecting with investors.

 

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[brighterside]

As an investor their going to ask you how came up with $347,000. Secondly, investors like to invest on people who have experience. Their going to recommend you find the right people first with experience before they will talk about investing. Lastly, their going to ask how much of your own capital have you put into this. If your a first time entrepreneur, solo founder, who don't wish to partner with others and asking for a boat load of money - your not going to get much luck even from the average joe. Just my opinion.

 

[GoneAt24]

As an investor their going to ask you how came up with $347,000.

The money is definitely all accounted for with market research. And if the investor thinks I could get it all done with less, I'd be happy to.

Secondly, investors like to invest on people who have experience. Their going to recommend you find the right people first with experience before they will talk about investing.

You mean experience building a website or experience gaining traction? I'd definitely surround myself with the right people. (Advisors, legal counsel, etc.) But do you think these 'right people' have to be equity holding founders? I don't, but I'd love to know your vantage point.

Lastly, their going to ask how much of your own capital have you put into this.

Trust me, if I had the capital I'd fund this thing 100% from my own pockets. I believe in this idea and my ability to execute/pivot like a true entrepreneurial champion.

Your opinion is valid, and much appreciated. This is going to be a challenge, I know. Hard to find luck; sure thing, but not impossible. I'm looking for the starting point. I'm looking for a leg up. Trying to find the "brighterside".

 

[GoneAt24]

asking for a boat load of money - your not going to get much luck even from the average joe

Also this money doesn't have to come from a single investor. Finding a lead seems to be the most difficult thing.

 

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[johnp]

What type of problem could you be solving in social media that a group of investors would be wiling to fork so much money over for? You don't need to give the whole thing away. Really, it's going to be hard to get an investment in social media with just an idea. It's possible (I did) but it's hard. And I got nowhere near what you are looking for. You need traction - people using your product. Unless it's something that's extremely breakthrough, even then it is hard.

 

[GoneAt24]

What type of problem could you be solving in social media that a group of investors would be wiling to fork so much money over for?

Social Proof of Problem:
Career Networking Tip - Facebook Privacy Settings for Your Job Hunt - YouTube
Facebook Parenting: For the troubled teen. - YouTube

Really, it's going to be hard to get an investment in social media with just an idea.

This, I know. Life is hard, and yet we get up everyday and face it. Oh to live, oh to live.

Unless it's something that's extremely breakthrough, even then it is hard.

Difficulty is not dissuasive. I only need to know where to start. After all, it's the crazy ones that do the most right? I see you're a fan of Steve Jobs.

How did you do it? You said that you didn't raise nearly 347k, but where did you start? Teach me, oh sensei. Haha.

 

[johnp]

How did you do it? You said that you didn't raise nearly 347k, but where did you start? Teach me, oh sensei. Haha

I just did it. There is nothing to teach. I don't know what the hell I'm doing half the time and I"m always wrong. It doesn't matter how much money you have and how nice your site is. If you have the energy, and you want it bad enough, like bad enough that you forget to eat, that you forget to sleep, that you forget to breath sometimes, then you will get it.

So how bad do you want it? If you want it bad, then just do it. Google investors. Ask people. Pick up the phone. And make something happen.

 

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[GoneAt24]

I just did it. There is nothing to teach.

I see. From one entrepreneur to another, then, do you still have connections to any of your previous investors? Would you be willing to get to know me, and make an introduction?

 

[H. Palmer]

Goneat24,

I literally know hundreds of investors.

You don't stand a chance. Any idiot can come up with a proposal for 35x.xxx dollars for technology and product development and many idiots do. And they get the door slammed in their face and rightly so.

Market research and an itemized budget are not enough. That won't get you anywhere.

What investors want: a carefully designed business model that is validated in the market

For carefully designed, start with MJ DeMarco's book "The Millioniare Fastlane". There you find the principles.
A business must be controllable, transferrable, scalable and protectable.

The market must be validated, at least by your ability to generate traction among users. Paying customers is better.

As to the entrepreneur, it's about your track record and about nothing else.

Become a proven entrepreneur first, then go to investors.

 

[GoneAt24]

You don't stand a chance.

Hmm.. I'll remember these words. Thank you for the fuel.

a carefully designed business model that is validated in the market

This, I have.

Thank you for the book reference. It may prove to be valuable.

Getting the meeting. That's my issue. If doors have to be slammed in my face, then so be it. But I'm confident in what I have.

 

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[H. Palmer]

Goneat24

You are in denial and your stubbornness is going to cost you dearly.

As anyone can read, you have no track record, no traction and no market validation, except in your own fantasy.

Like 10 000s of other wantrepreneurs, you think your issue is getting the meeting. It's not. It's becoming a real entrepeneur. Those are the ones who get the meetings.

 

[brighterside]

Goneat24,

Amschel is right. I've actually went and done the pitch based on my business plan, an outstanding team, cost analysis, exit strategy, prototype, and even put up some of my own funds at a much lower start up cost than yours. You'll need to do much, much, more than just a basic idea if you want to really attract investors. I also don't think you have a chance.

 

[GoneAt24]

Goneat24

You are in denial and your stubbornness is going to cost you dearly.

As anyone can read, you have no track record, no traction and no market validation, except in your own fantasy.

Like 10 000s of other wantrepreneurs, you think your issue is getting the meeting. It's not. It's becoming a real entrepeneur. Those are the ones who get the meetings.

I fear this thread is becoming increasingly offset from it's original purpose. If anyone has any leads or advice on how to get a lead investor, please feel free to PM me. This experience has been invaluable.

 

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[JEdwards]

I fear this thread is becoming increasingly offset from it's original purpose. If anyone has any leads or advice on how to get a lead investor, please feel free to PM me. This experience has been invaluable.

Raising money is really simple.

Who can make money from what you are doing? Go to them and ask them for the money.

If I had an awesome idea to open an online jewelry store for example, and needed money, I wouldn't be asking people online, I would walk right into the best jewelry stores in town, ask for the owner, sit down with him/her and lay it out and ask them for money. 1. They can validate your idea, 2. If they like your idea they can give you money, 3. They can give you inventory.

Now I know you will say, but Jack, wont they steal your idea. Maybe but my guess 99% won't and even if they did so what, can they do what you do..

 

[million$$$smile]

A business must be controllable, transferrable, scalable and protectable.

Worth repeating.

The difference between BIG money and HUGE money...

Randall

 

[DeletedUser2]

@gone,

your just not listening. and that will cost you dearly with investors.

so, my experience over the last 15 yrs of raising money, I have raised over 90M dollars.
Yes, that much..


you will be pushed out of every meeting with your attitude. your not willing to listen to others, that means you wont listen to your future customers either. that, sir is a recipe for disaster.

any leads you get for investors, are already burned. no one will give leads. you have to get out there and get them yourself.
and after you get tired of burning your investors to the ground, maybe you will come back here, and ask in a way, that shows your ready to learn.


Good luck, Jack Edwards has the best advice on this thread.
P.S. Your lack of humility will really steal time from you. good luck on that.

Z

 

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[GoneAt24]

If I had an awesome idea to open an online jewelry store for example, and needed money, I wouldn't be asking people online, I would walk right into the best jewelry stores in town, ask for the owner, sit down with him/her and lay it out and ask them for money. 1. They can validate your idea, 2. If they like your idea they can give you money, 3. They can give you inventory.

This was a very creative way of thinking about things. It's good to think outside of the traditional sphere of funding. Thank you.

 

[GoneAt24]

P.S. Your lack of humility will really steal time from you. good luck on that.

I'm unsure as to why I'm being perceived as having a lack of humility or an unwillingness to listen. I came here searching for advice given my particular situation. (Perhaps a mistake in itself.) I thought that I made that clear. The majority of posts have been about how I won't be able to make it because all I have is an idea.... ?? I never said that. I'd love to listen. I'd love to soak in. I'd love to figure out HOW if such ans such knows "hundreds" of investors they got to know that first one. I'd love to know HOW if you've raised over 90M you raised that first 1M.

I simply wanted to be pointed in the right direction. Starting from the things I listed. How would one get ONE meeting with an investor. How would one get a mentor to then get an investor? So far I've gotten one good post with advice, and many on why things aren't looking too bright. Forgive me if I'm being too stern, but perhaps it was a logical misstep to think that anyone with connections would be posting on this forum. I'm waiting (and wanting) to be proved wrong.

In summation, I don't believe that humility is lacking. I want advice on how to get that first investor. Or mentor. Or lead. Or connection. I'm aware of the difficulties. I have more than an idea. PM me if you think you can honestly help.

 

[GoneAt24]

Originally Posted by Amschel
A business must be controllable, transferrable, scalable and protectable.
Worth repeating.

The difference between BIG money and HUGE money...

Randall

Agreed. These I have. But even a perfect plan will only get you so far.

 

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[Likwid24]

Create a great product and investors will come to you. I've turned away more investors than I can count in the last two years. Not once did I seek one out.

 

[GoneAt24]

Create a great product and investors will come to you. I've turned away more investors than I can count in the last two years. Not once did I seek one out.

I agree with you here 100%. This would be the best way to get funding. Perhaps I should take a year to learn backend programming so I can build the product.

In the meantime, given my non-best circumstances, is there any way to make a connection with an investor? Possibly not even to invest right away. If only to mentor me through the investing process, then I would be in a great position. So maybe the question should be changed: What is the process of finding an investment mentor?

 

[johnp]

, then, do you still have connections to any of your previous investors? Would you be willing to get to know me, and make an introduction?

Of course I do. But they aren't the type of investors that you need. So I'm sorry but no.

You have just been given some great adice from some very successful people. You probably don't know that because you are new here. Soak it all in and don't take offense to anything...

With that said, I believe anything is possible. But believing isn't enough. You have to take action, and once you start taking action you can't stop moving forward. You will figure it all out in time.

Good luck

 

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[MJ DeMarco]

A great product doesn't need to solicit for investors, they will come knocking down your door. Without the great product or the track record of experience, you're just another guy among millions with an idea and 100 page business plan.

In the meantime, given my non-best circumstances, is there any way to make a connection with an investor?

Bootstrap the product yourself and let the product do the work. If the product is that good, the investors will appear like moth to a flame.

Thread moved.

 

[GoneAt24]

Bootstrap the product yourself and let the product do the work. If the product is that good, the investors will appear like moth to a flame.

I think that we can all attest to the fact that building the product and letting investors come to you is the absolute best way to do it.

That: Solved.

I think this redirection will help. No more advice. This thread is now a theoretical problem. Hypothetical. Think of it as a short essay question on a job interview.

Given: Perfect plan. Prototype. Skill set: Front end programming.
Need: Investor or Investing Mentor.

You have no option to learn backend programming to build the site yourself, because you must get the product build within the next 6 months. You have no option to find a cofounder, because you wouldn't meet your monetary goals with a founder's dilution. How would you go about solving this problem?