Question about funding my startup

digiology

antoinolachtnai wrote: »

Well, this 'unit' that you're buying, it must have a supplier, and one of those suppliers would be the obvious partner.

When you say 'supplier' do you mean manufacturer or some middle man like a wholesaler?
No single manufacturer will cut it, I need a variety of equipment.

A year sounds like a long time to wait to launch - someone could have stolen a march on you by then. If it's really a big potential, you might need to get more money in order to allow you to be appropriately aggressive.

Thats why I'm not telling anyone, this could have been done 4 or 5 years ago but it hasn't which baffles me.
I can't see me getting more than 100k in my wildest dreams, if we can launch with something decent and credible thats unlike anything else out there then I would think that we should be able to attract additional investment before competitors emerge.

digiology

kenbrady wrote: »

If you say it's what you say. A proper business plan is all that it would take to raise a million.

I hope you're right. A million would probably be a bit much, I'll have to do more research but I cant see us serving more than 100 people an hour even with infinite capacity and loads of marketing. Its a new idea but the market is still a little niche.

I've seen every type of start up company, none have ever had a paid for product, that can be launched via word of mouth, with the only issue how to meet customer demand.

Put that way it does make me sound a little crazy. There'd be marketing involved, I really do feel that the necessary marketing budget would be quite small though.

antoinolachtnai

100 people per hour isn't that much - problem is that a lot of people will probably want to use this whatever-it-is at the same time.

I think you should think about what amount of use you could realistically get in Europe and the USA and use that as some sort of starting point for what size your business would ideally need to be. Not saying you start by developing and launching to hit that market, but that you have some sort of plan to get there, eventually.

digiology

antoinolachtnai wrote: »

100 people per hour isn't that much - problem is that a lot of people will probably want to use this whatever-it-is at the same time.

I think you should think about what amount of use you could realistically get in Europe and the USA and use that as some sort of starting point for what size your business would ideally need to be. Not saying you start by developing and launching to hit that market, but that you have some sort of plan to get there, eventually.

Perhaps that approach would probably be better but I would assume an investor would be more likely to make a small risk rather than a big one. Sure, if I can convince them but this is a new idea in a fairly niche market.
Thanks for your help, I'll have to keep this in mind as an option.

antoinolachtnai

Nope, that is not necessarily the case. It depends on the investor, but if they want to reduce the risk, by spending more money if necessary.

strange but tru

Just thaught I could help in some what with your question


when it comes to state bodies you would need to prove that there is a market for your product or service which you say is quiet nieche which is not what they want to hear I am afraid.

To be honest it is the same with most banks and at the moment , your main source would have to be private investors which again in the modern economic climate are turning down most buisness plans without concrete figures based on reliable sales figures calculated in a real time market which for a nieche buisness is almost impossible. Also you dont sound like you have much buisness expierence which is another negative but one that can be rectified by gettting a partner with the buisness skill required and maybe some cash ????

All of the above sounds complicated but it boils down to this, how do you know pepole want your service or product and if the answer is yes what is to stop a larger company with more money for advertising just wiping the floor with you????

I have had meetings with private investors and banks over the years and to be honest unless you have an iron clad buisness plan with every detail accounted for your not going to get a penny.

ON the point of knowing what you can recoupe if the buisness goes belly up is an absolute must, any investor of any kind wants to know what happens if things dont work out and what are you going to do to get them some return on there investment.

To be honest most meetings go down the road of what if your wrong ?what if you dont make sales ? what do you plan to do about it when your 40K in the hole and things arent going the way you planned.

This is worst case senario for most investors so thats what there worried about not the what if it takes off and we all make money.

Oh and a crazy figure like 9k a month in month four is sadly unrealistic even with major marketting behind you and i mean major advertising a web based service or product is lucky to have gotten 200 hits by month 3 and I mean spending 60k on advertising alone and thats from expierence. If your planning on word of mouth remember the proven fact that if someone get a good service or product they tell 3 friends who tell no one else if they get a bad service or product they tell 10 who in turn will tell at least 3 each .

pm if you think I might be able to help

kenbrady

strange but tru wrote: »

when it comes to state bodies you would need to prove that there is a market for your product or service which you say is quiet nieche which is not what they want to hear I am afraid.

Not true, niche has nothing to do with demand, in fact niche can be good as you can charge a premium.

Ferrari's are a niche product.

State bodies look at the overall business and it's potential to make money

digiology

strange but tru wrote: »

when it comes to state bodies you would need to prove that there is a market for your product or service which you say is quiet nieche which is not what they want to hear I am afraid.

I should probably say that when I mentioned it being niche I was more so trying to highlight the fact that its likely to be an unfamiliar market to business people. There are quite a few companies pulling in billions from it (I'm using the term market to refer to many related product not in competition with my own idea).
Investors are unlikely to be convinced of this unless they know the market which I can't see as likely in Ireland. Besides that, I suppose it comes down to numbers. How do I prove that there is a market for something that doesn't exist?
Are there websites that will help with this? I am aware of companies that my target market currently buy from, perhaps various annual reports might be a place to look.

strange but tru wrote: »

All of the above sounds complicated but it boils down to this, how do you know pepole want your service or product and if the answer is yes what is to stop a larger company with more money for advertising just wiping the floor with you????

I have had meetings with private investors and banks over the years and to be honest unless you have an iron clad buisness plan with every detail accounted for your not going to get a penny.

ON the point of knowing what you can recoupe if the buisness goes belly up is an absolute must, any investor of any kind wants to know what happens if things dont work out and what are you going to do to get them some return on there investment.

To be honest most meetings go down the road of what if your wrong ?what if you dont make sales ? what do you plan to do about it when your 40K in the hole and things arent going the way you planned.

This is worst case senario for most investors so thats what there worried about not the what if it takes off and we all make money.

I'm starting to realize that I'm going to have to aim a lot higher in order to get this off the ground. I figured if I could convince a bank to give me 60,000 I'd be sorted but I'm going to need a decent business plan and some solid market research.
My main question then is: where do I start and can you recommend any books

lion_bar

digiology wrote: »

I hope you're right. A million would probably be a bit much, I'll have to do more research but I cant see us serving more than 100 people an hour even with infinite capacity and loads of marketing. Its a new idea but the market is still a little niche.

Do i have these figures right? You're looking for 80,000 approx, to setup some service/product, that you'll be paid 1 euro per hour for with maybe 100 user every hour?

Does that mean you'll get revenue of 2,400 per day?

digiology

lion_bar wrote: »

Do i have these figures right? You're looking for 80,000 approx, to setup some service/product, that you'll be paid 1 euro per hour for with maybe 100 user every hour?

Does that mean you'll get revenue of 2,400 per day?

No, I was saying that on average 100 users concurrently is probably the maximum I'd get if I have infinite capacity. Although to be honest I picked this number out of nowhere so I need much more research.

Each unit costs between 1000 and 3000 euro and will serve one person at a time.
80,000 at lets say 2000 a unit (although it should be less on average) gives 40 units and thus 40 concurrent users at the most.
Not all units are going to be equally used so I could estimate that there may be about 25 users using the service per hour 24-7.
I'm obviously simplifying, there will be broadband, electricity and some limited marketing and support costs (I hope). I'll have the software done on my own time so that'll be taken case of.

Thats 600 per day at 1 euro an hour. Its likely I'd start out at 2 euro an hour and bring it down if necessary. 1 euro certainly seems like a nice sweet spot but given that I'd have limited capacity and this is an entirely new service I should be able to charge a little bit more.
Its all very scalable, every month I could add more and more units using the profits to expand it further.

I suppose what I need to be able to convince investors of is that I can get those 25 users an hour and that they will be willing to pay this amount.

SpinTech

Hi,

I have a colleague who is heavily involved in finding 'angel' investors for startup companies.

I'm new to this forum so is there a way you can contact me directly - I don't want to publish and names and contact details in the public forum?

digiology

SpinTech wrote: »

Hi,

I have a colleague who is heavily involved in finding 'angel' investors for startup companies.

I'm new to this forum so is there a way you can contact me directly - I don't want to publish and names and contact details in the public forum?

To be honest, I'm not ready for that yet. I don't think I'll be successful getting an investor on board until I have the software written and ready to go and also a solid business plan.
Before I spend months developing I do need to gauge if this will work specifically if I'll find investment afterwords. Its too early to disclose my idea to investors and I've heard that investors are reluctant to sign NDAs in general.
I could of course get investment for the development and hire some programmers but that would simply up the amount of investment needed even more.

I might PM you in a few months however, thanks.

SpinTech

Sounds sensibly cautious - best of luck anyway.

hinault

Have you really tried all of the banks, seeking a loan?
Have you approached all of the domestic banks for a loan?
Have you approached all of the foreign banks here for a loan?

The leasing equipment option would seem to be a good option as stated earlier?

Or how about seeking capital investor?

Have you consider approaching venture capital companies?
Usually they invested in companies which are up and running but some venture capital companies are prepared to invest in startups?
There are plenty of venture capital companies seeking to invest in viable ideas - in return for an equity stage bolted on to a fixed term investment
time period.

digiology

hinault wrote: »

Have you really tried all of the banks, seeking a loan?
Have you approached all of the domestic banks for a loan?
Have you approached all of the foreign banks here for a loan?

I haven't even tried one yet, most responses in the first page of this thread seemed to suggest I wouldn't get a loan without investment or my own money.

hinault wrote: »

The leasing equipment option would seem to be a good option as stated earlier?

I'm looking in to this, it seems to be quite unusual to lease this equipment, especially long term but there are companies that do it.

Or how about seeking capital investor?

Have you consider approaching venture capital companies?
Usually they invested in companies which are up and running but some venture capital companies are prepared to invest in startups?
There are plenty of venture capital companies seeking to invest in viable ideas - in return for an equity stage bolted on to a fixed term investment
time period.

Yup, I'll take whatever I can get. Right now I'm just figuring out what the likelihood is of me getting investment whether from a bank loan, investor or VC.

strandsman

Did you get your business setup digiology. What is it you do?

digiology wrote: »

I haven't even tried one yet, most responses in the first page of this thread seemed to suggest I wouldn't get a loan without investment or my own money.


I'm looking in to this, it seems to be quite unusual to lease this equipment, especially long term but there are companies that do it.



Yup, I'll take whatever I can get. Right now I'm just figuring out what the likelihood is of me getting investment whether from a bank loan, investor or VC.

chrisfitzp

Here's a brilliant guide on Government Grants that you should find useful... You can apply for more than one grant, and get up to 100k... http://www.bullethq.com/ebook-how-to-get-100k-free-off-the-government.php