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  1. #1
    Formerly known as RockNRollPig Shpigford's Avatar
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    Anyone ever looked for/received any funding for a business?

    A few months ago I officially started my business. I've got ideas popping out of my head and a few started with a couple of developer friends of mine but would like to find some funding to be able to pay myself and a couple of developers a salary to develop things full time. I'm extremely confident in my ideas but just need some capital to help see them to fruition.

    Sooo, all of that being said...has anyone ever received any funding from some sort of venture capitalist or anything of the sort? What is the process for looking for that sort of thing?

  2. #2
    Web Design Ireland cianuro's Avatar
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    Have you spoken to your bank manager? That is usually the first step after my ideas have been developed and a business plan has been drawn out.

    Are your ideas sound? Do you thin you could invest youself? Friends, Family?

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    SitePoint Zealot Charlie_chalk's Avatar
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    I wouldn't say the money/funding is to "pay myself and a couple of developers a salary". Investors llike to know their money is going into building the business, things like marketing, advertising, stock, premises etc - items that are going to help give them ROI.

    Paying you and your developers might not be what they want to hear.

    CC

  4. #4
    Not now, I'm kinda busy. pdxi's Avatar
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    I've never sought funding or venture capital for projects, but I have taken ideas to my existing clients. If I have an idea that might be of interest to a past or present client, I'll mention it to them and ask if they would like to discuss it further. If they do, I have them sign my NDA and the discussion begins.

    If/when development begins, we'll establish a profit/revenue-sharing agreement to make sure that everyone is paid what they deserve. Typically the work is split between the two parties, with one party being responsible for development (me) and the other party being responsible for marketing (the client).

    For me, this works because my "marketing muscle" isn't well developed, and the project benefits from my clients' often more established contacts and connections. This takes a lot of the burden off of me, so that I can focus on getting the R&D work done.

    Maybe this won't work for your situation, but it may be something to consider for future projects - ?
    Jeffrey Hunt, freelance PHP & MySQL developer
    Resume: http://www.jeffreyhunt.org/resume/

  5. #5
    SitePoint Enthusiast Swashbuckler's Avatar
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    Quote Originally Posted by RockNRollPig
    A few months ago I officially started my business. I've got ideas popping out of my head and a few started with a couple of developer friends of mine but would like to find some funding to be able to pay myself and a couple of developers a salary to develop things full time. I'm extremely confident in my ideas but just need some capital to help see them to fruition.

    Sooo, all of that being said...has anyone ever received any funding from some sort of venture capitalist or anything of the sort? What is the process for looking for that sort of thing?
    Hi RockNRollPig, just thought I would offer my 2 cents worth on the subject. Now I've been involved with VC's from my initial job working in the City (London) and in respect of financing a business proposal a few years ago so I have a fair idea how they operate and what they like to see.

    Without wanting to disenchant you as a whole VC's tend not to fund creative enterprises unless they have a solid trading history. To all intent and purposes your business is a startup, as mine was, and you might find it tough going to persuade VC's to invest in it. Even if you do manage to persuade a VC to invest you would probably have to give up a fair slug of equity and control of the business. Would you be prepared to give up 50% equity in the business for x?

    Also you have to bear in mind that any VC that comes on board will demand to have a day to day influence on the business and a position on the board (if a limited/incorporated company).

    I would also ditch the need for capital for payment of salaries. That's number one on VC's pet hate list. Their aim (and this includes banks as well) is to maximise a return on their investment and not to fund a lifestyle business. They would want to see just how committed you really are to the business and that may mean not having a salary or at the very best paying yourself and your staff a minimum wage for the first couple of months if you can afford to.

    Now echoing what others have said on this thread I would suggest you speak to your bank manager. They can help you in respect of your business plan and if you have sufficient security available provide the business with a start-up loan.

  6. #6
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    Finding a VC will be all but impossible....Try to get funding from a bank, if you're in the United States visit www.sba.gov and www.business.gov.

    Your best chance is if you know someone personally who has influence at a bank or has money to invest.

    I'm in the same boat as you, however Sunday I got really lucky. I was at the Patriots football game and realized the gentlemen sitting next to me, who I know on a limited basis, is a regional president for a national bank...cha ching...I spoke to him about the businesses and my attempts to obtain a loan and he told me to stop by one of his branches and he could probably help me out.

    It is all about getting lucky and networking....hopefully I can obtain a loan for my company and hopefully you can figure something out for yours...good luck.

  7. #7
    Not now, I'm kinda busy. pdxi's Avatar
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    Oh, that's right... check out a SBA micro loan.
    Jeffrey Hunt, freelance PHP & MySQL developer
    Resume: http://www.jeffreyhunt.org/resume/

  8. #8
    SitePoint Wizard silver trophy
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    SBA loans typically require collateral. We got a 50K SBA loan to start a business a few years ago and I think it was still considered a micro loan. It had to be secured with major collateral (a house) to be approved.

    Another great source of funding, and a source that's usuallly somewhat willing and lenient, is friends and family. We borrowed a large amount from one family member with a structured loan repayment, got the SBA loan and also put in everything we had personally.

    VC money is like winning the lottery - don't count on it. Plus, most startups only need between $100k and less than $1M. VC's won't usually touch a project that doesn't require at least $20+M to fund. They want high returns - there's the same time commitment w/ a $1M or $50M investment and more of a return on the larger if it makes it.

    And don't even consider grants or other free money. Schools and nonprofits get grants; that's about it. Unless you're a female minority with 2 kids living on a low income you're probably out of luck in that regard.


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