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  1. #1
    SitePoint Zealot Roar's Avatar
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    How to get funding for any idea you have

    IF you have a great idea for a website or web app, and no money to fund development, then know this: there is a way.

    Here's how. And this method does not require a VC.



    Firstly your idea should be very well conceptualized. Meaning that you should already have a clear vision of what it will be, and what the potential is. You are nothing more than a theoretical optimist if all you have is "just an idea" in your head about what you want to create. Make it real by writing about it, drawing conceptualizations, researching the market, and planning long term.


    The next step is getting the funding.
    You need to find a company to SELL the idea to. Your not going in ASKING for funding - you are SELLING the concept, just as you would sell them a project that they requested you to bid on. So get that mindset established. Don't expect anyone to give you money - provide them with real value and they will buy in to the idea.

    Finding investors: this strategy is not to find "rich people" or Venture Capatalists. That's an obvious route and I wouldn't be posting here if that's all I was going to tell you. Instead, you will find the most qualified companies to "buy your idea". By qualified, I mean: a company that will directly benefit from this idea fufilling it's potential.

    Think about this: who would benefit the most by having your idea take full form? For example, if you have a wicked idea that could revolutionize the way people order paint online, then you might approach the biggest paint company in the world: Benjamin Moore. Yet it doesn't have to be a fortune 500 company, you can qualified companies in any major city.

    So - is there a specific company that would be interested in seeing my website idea come to life, and if so, would they be interested in investing into this if I offered upto 75% of the ownership?

    75% you say! Depending on how difficult it may be to find qualified companies and how bad you need the money - yes you have to be willing to give up as much as 75%. Rule of thumb is to never go below 25% ownership for yourself. And anyone who is going to take all the risk by investing all the moeny for the project deserves up to 75%.

    As much as it would be ideal to own your idea and the website years down the road, your going to have to make a sacrifice to get this idea out there.

    After finding qualified companies - have a meeting & make a basic presentation outlining the idea, the potential, and the reason why it's an advantage for this company.

    Remember that there's no need to put all your eggs in one basket - even if your first pitch fails to get the investment you can duplicate this presentation and scale up the amount of qualified companies you target.

    And that about concludes a basic summary of this strategy. When you get the funding, use your expertise to make it happen. Leverage the money to hire or outsource the experts required to build it.

    Feel free to chime in with your own questions or input.
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  2. #2
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    75% ownership is a lot to give up. You realize that means you no longer control your idea/company, right? You can be thrown out and replaced by someone else at whim.

    Rather than do what you suggest, why not patent the idea and license the patent to these appropriate companies?

  3. #3
    SitePoint Wizard
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    A patent does sound better but you still have to find someone to buy it and produce it. If the project is going to cost alot of money you will have to give up a good portion of control to get it funded. The best way is to try and find people to invest in it like family or friends that you are willing to loose if it goes wrong.

  4. #4
    SitePoint Enthusiast jawzishere's Avatar
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    75% is a lot and it would be best to try and get your idea out there without giving up this much of the business but if it's your last resort then it can be very worth it.

    To keep from getting kicked out all you'd need to do is make sure you have a well defined and detailed contract.

    Plus if your idea really does take off and you make a lot of money from it you can sell your part of the business and start something new yourself with the money you now have. A lot of people don't stick with one business idea their whole life, instead they build it up sell it and build something else up and typically repeat the process.
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  5. #5
    SitePoint Zealot Roar's Avatar
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    Quote Originally Posted by jawzishere View Post
    Plus if your idea really does take off and you make a lot of money from it you can sell your part of the business and start something new yourself with the money you now have. A lot of people don't stick with one business idea their whole life, instead they build it up sell it and build something else up and typically repeat the process.
    That's a great point because, if your idea succeeds like you envision - you will have a healthy chunk of new capital even with a 25% share. Now you can take this money which did not exist before, and invest it again into another idea. This project you may be able to fund entirely yourself - or perhaps look for funding again yet this time take a larger chunk of the ownership. Plus, you'll have more leverage to get funding and better terms because you already have a successful project in your portfolio you can use as a case study example to excite potential investors.

    Getting a patent is not part of this strategy in the early stages because the intention here is to get your idea out there FAST. I don't have a patent, but from what I understand they can take months or even years to process. All that time is just wasted when you could be manifesting your idea in a more powerful way.

    Too many of us sit on great ideas and put them off until they never see the light of day. The truth is if you have an amazing idea, you also need the balls to make it happen without hesitation.
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  6. #6
    SitePoint Evangelist Fergal's Avatar
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    Nice post, I do like the idea of approaching major companies and the paint company example is a good one.

    You might also considering looking for investors on the major webmaster forums such as SP.
    Fergal Crawley (Previous Username: Proudirish.com)
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  7. #7
    SitePoint Evangelist Fergal's Avatar
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    I've just seen Prosper.com which could be a good resource for anyone in the US looking for online business funding.
    Fergal Crawley (Previous Username: Proudirish.com)
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  8. #8
    I &lt;3 Internet Tekime's Avatar
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    75% is a lot. If the idea is really any good one should seriously think about it before giving up a majority stake.

    Patents do cost money though, I'm not sure how cheap they can be filed now but a professional trademark attorney filing is IIRC about $5,000.
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