Hi Guys
Ive been thinking about the difference between going it alone and running a business as a single founder keeping 100% equity VS giving away equity in return for co-founders / investors and how much value they provide in return (obviously the particular individual is a huge factor).
Being inspired by MJ's book, i'm currently about to launch my online business, where i will be marketing other peoples software and information products for commission.
I've always been independent and preferred working on my own rather than in teams since i was a kid (i think i can get a better job done this way usually
), MJ's story and Felix Dennis's advice- that ownership is everything and you should aim to keep 100% of the equity if you want to get rich- has meant that I've been comfortable bootstrapping and doing everything on my own (graphics, copy, html/css/php, support, marketing) but hopefully will be reinvesting the first few sales into hiring freelancers and run ads.
I also like the control i.e being able to make decisions regarding the business on my own and therefore not work on a strategy i don't believe to be best.
Time will tell, but I believe i can make this current business a success- profitable from the beginning and scalable over the next few years without a co-founder or outside capital. So I havn't been looking for co-founders/investors/funding as i don't think i need it and don't want to dilute my equity.
Recently though, listening to the mixergy interview with Paul Graham, i learned that Y combinator (seed capital and mentorship for startups) are very reluctant to fund single founder startups and reasoned that very few successful tech companies started with a single founder.
I cant tell whether having co-founder(s) is just a diversification strategy in the interest of an investor, or whether it is also beneficial from the entrepreneur's perspective- e.g to share the workload, ideas, provide motivation where the end result (effect on profit) is much greater than the sum of the two?.
My current (ambitious) goal is build-to-sell ASAP + cash out $6-10m. Hoping to try and grow to ~$2m annual profit to acheive this.
I wouldn't mind being able to access knowledge / advice that investors could bring and i was browsing for info on what incubator do, but not sure if it would be worth giving equity for.
Obviously it would be worth it to give away X% if they could increase the value of the business >X% ,compared to what i could do myself, but since im starting for the first time i really have no idea how much value an investor would add, or indeed my capabilities or how much i should value my business at (havnt even started making sales but has high potential in my opinion).
To anyone looking to start, or already running their business- did you go it alone, have a co-founder or investors. Why? What are your experiences positive and negative with your decision to go that route?
Do you recon its best to try looking for a co-founder/investors from the get-go, or build and grow alone and then look once i have a cleared idea of how much i think they might contribute and have a greater idea of my capabilities and value of the business?
Ive been thinking about the difference between going it alone and running a business as a single founder keeping 100% equity VS giving away equity in return for co-founders / investors and how much value they provide in return (obviously the particular individual is a huge factor).
Being inspired by MJ's book, i'm currently about to launch my online business, where i will be marketing other peoples software and information products for commission.
I've always been independent and preferred working on my own rather than in teams since i was a kid (i think i can get a better job done this way usually
), MJ's story and Felix Dennis's advice- that ownership is everything and you should aim to keep 100% of the equity if you want to get rich- has meant that I've been comfortable bootstrapping and doing everything on my own (graphics, copy, html/css/php, support, marketing) but hopefully will be reinvesting the first few sales into hiring freelancers and run ads. I also like the control i.e being able to make decisions regarding the business on my own and therefore not work on a strategy i don't believe to be best.
Time will tell, but I believe i can make this current business a success- profitable from the beginning and scalable over the next few years without a co-founder or outside capital. So I havn't been looking for co-founders/investors/funding as i don't think i need it and don't want to dilute my equity.
Recently though, listening to the mixergy interview with Paul Graham, i learned that Y combinator (seed capital and mentorship for startups) are very reluctant to fund single founder startups and reasoned that very few successful tech companies started with a single founder.
I cant tell whether having co-founder(s) is just a diversification strategy in the interest of an investor, or whether it is also beneficial from the entrepreneur's perspective- e.g to share the workload, ideas, provide motivation where the end result (effect on profit) is much greater than the sum of the two?.
My current (ambitious) goal is build-to-sell ASAP + cash out $6-10m. Hoping to try and grow to ~$2m annual profit to acheive this.
I wouldn't mind being able to access knowledge / advice that investors could bring and i was browsing for info on what incubator do, but not sure if it would be worth giving equity for.
Obviously it would be worth it to give away X% if they could increase the value of the business >X% ,compared to what i could do myself, but since im starting for the first time i really have no idea how much value an investor would add, or indeed my capabilities or how much i should value my business at (havnt even started making sales but has high potential in my opinion).
To anyone looking to start, or already running their business- did you go it alone, have a co-founder or investors. Why? What are your experiences positive and negative with your decision to go that route?
Do you recon its best to try looking for a co-founder/investors from the get-go, or build and grow alone and then look once i have a cleared idea of how much i think they might contribute and have a greater idea of my capabilities and value of the business?
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