Questions

What are some alternate sources of fundraising for first time entrepreneurs after friends and family can no longer offer any additional funding?

I have been working on bringing my first start-up to launch for the last 6 months. Our last barrier to launch is financing the development of our website. The website has been designed and is ready to be developed but we are short of the money we need to finance the development. The amount of money we need for development is roughly 1/3 of the total financing we have raised so far. I will not stop until the development has been complete but I am running out of ideas for how to raise the money to do so.

6answers

I have bad news: If friends and family are no longer able to provide funding and you have raised $10,000 or more without having developed a website, then you have close to zero chance of attracting angel investors.

Whatever money they have invested is essentially funding a learning lesson around what to do differently next time.

Any investor who doesn't have a *pre-existing* relationship with you is unlikely to fund you without seeing the product live. You could try to get into an accelerator but even mediocre accelerators (that provide capital) are not accepting pre-product idea teams except for very rare occasion.

A good founder must be *relentlessly resourceful* so sell whatever you can, do whatever is in your power to create money, try to borrow money with a personal guarantee from friends and family.

I believe in giving honest and useful feedback. I hope it helps!


Answered 5 years ago

I'm sure you know "crowd sourcing" is big these days and "Peer to Peer" lending might be available in your state.

With some good press, well written articles, and a quick interesting video you can attract the interest of the public that often times just wants to be 'in on something good'. To have the connection with your project or just helping a fellow human achieve their dreams. Never underestimate the power of the internet.

I could give you some site names, but googling the information in quotes should get you plenty of options.

Enjoy your weekend.


Answered 5 years ago

Agree with both prior comments. If the product or service is essentially the website and you cannot develop it to showcase it, then the cart is leading (or not) the horse. However, to try and be pragmatic, I would say a crowd funding or hitting the expanded friends and family circle may be the best options. $3K doesn't seem unsurmountable, but if you were asking me to invest, I would wonder why 2/3 of the investment thus far were not spent on the 1/3 that appears most important to show proof of concept and generate revenue/gain additional investment interest. Maybe there's also a way to cut back some of the features and focus on what's most important, building the rest, once the fundamentals are working and have attracted an audience. I like the PR idea, but without something to show, you better be one heck of a convincing story teller. For borrowing from known "investors" www.trustleaf.com may be of help.


Answered 5 years ago

Find a developer to join you team at an equity position. Many MVP apps can be developed in 2-3 months, sometimes in weeks. You may want to submit your project to an organization like www.AlchemyLab.co who has students complete real world development projects.


Answered 5 years ago

I have good news for you: generate revenue. Don't get stuck in the thinking that your only options are friends/family/fools, angels, VCs, or crowdfunding. Why not let you customers pay you to change their world, or some very small but significant part of it? If what you're building has value to them, price it and sell it to them. I am almost positive you don't need an engineer to help you get to your first paying customer, and I don't even know what industry you're serving. If you are committed, scrap your way to being a revenue-generating company.


Answered 5 years ago

After $10,000, I'd readjust your thought process on "raising money", because at this point it's not as issue of needing to raise more money as it is an issue of cash-flow in order to survive.

I'd approach this from two angles-- how can you REDUCE the capital you need to the absolute minimum to improve your product to get to a scalable point, and how can you start GENERATING profitable revenue immediately. Once you figure those two things out, execute, execute, execute!


Answered 5 years ago

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