Raising Money/Capital

[john voight]

Arright BFI. I am guessing there are posters here who have or are running some type of business. It could be a home based business (where you build custom PCs), or it can be an online business (running a website w/ lots of ads, etc...).

Now I am guessing the usually way this type of asset develops is from scratch; something small, over time, gets bigger. Well, here I am trying to start off w/ something that is small, but not tiny (like a free word press blog).

I am looking to start a website. One that functions pretty intricately. This will require coding in several languages, and thus can possibly run up to $2,000 for a decent job. If you guys are asking what it is; basically a youtbe site with some very significant differences that would really cator to niche needs (IE you odnt just log on and say "ohh lets surf". You log on and say "okey I want to watch another independent movie")

Anyway, the business, or website is besides the point of the post. My post is aimed at some questions regarding using other ppl's money to make the site.

A. Have any of you started a website, small business. If so, how did it develop. Did you just stick $1,000 of your own money into it?

B. How would you go about getting money from strangers. Are there any online sites/forums that network ppl for this purpose?

C. If raising $1,000 or $1,500 is out of the question, what would my best option be?

Note: Money is not an issue for me; I could prolly make 5 of these sites w/ my own money. I am just trying to lower my risk, b/c I am a novice in the field, and would prolly be less succesful if I was the only backer involved in this deal. If I would have 3-4 other backers involved, there would be much more interdependence involved, and we would all put our brains together.

A good analogy to how I am trying to get this thing started,IMO, is taylor and andrew and josh (i think) starting up cardrunners; it was a team effort.

So any advice would be nice. I am not looking for anybody's money here. I am looking for a discussion on how to get your feet off the ground while minimizing the inevitable risk.

[soko]

Explain again how you plan to use credit to lower risk?

[john voight]

[ QUOTE ]
Explain again how you plan to use credit to lower risk?

[/ QUOTE ]

well If a buddy of mine puts in 1,000 and i put in 1,000, the site tanks, I lose 1,000 instead of 2,000.

I am not talking about risk in relation to the return; so sure if i finance the whole thing I get 100% of the money I make, apposed to 50% or 55% (or w/e) if I split the site w/ a buddy.

Is my reasoning off base here? B/c I'm a noob so point out any flaws in my thinking.

FWIW, I'm guessing I willl end up financing at least 60%, I'm just trying to get a feel for my options.

Once again, I am going to start a website. Nothing fancy. We are talking about peanuts really in relation to other businesses.

[Phone Booth]

[ QUOTE ]
Arright BFI. I am guessing there are posters here who have or are running some type of business. It could be a home based business (where you build custom PCs), or it can be an online business (running a website w/ lots of ads, etc...).

Now I am guessing the usually way this type of asset develops is from scratch; something small, over time, gets bigger. Well, here I am trying to start off w/ something that is small, but not tiny (like a free word press blog).

I am looking to start a website. One that functions pretty intricately. This will require coding in several languages, and thus can possibly run up to $2,000 for a decent job. If you guys are asking what it is; basically a youtbe site with some very significant differences that would really cator to niche needs (IE you odnt just log on and say "ohh lets surf". You log on and say "okey I want to watch another independent movie")

Anyway, the business, or website is besides the point of the post. My post is aimed at some questions regarding using other ppl's money to make the site.

A. Have any of you started a website, small business. If so, how did it develop. Did you just stick $1,000 of your own money into it?

B. How would you go about getting money from strangers. Are there any online sites/forums that network ppl for this purpose?

C. If raising $1,000 or $1,500 is out of the question, what would my best option be?

Note: Money is not an issue for me; I could prolly make 5 of these sites w/ my own money. I am just trying to lower my risk, b/c I am a novice in the field, and would prolly be less succesful if I was the only backer involved in this deal. If I would have 3-4 other backers involved, there would be much more interdependence involved, and we would all put our brains together.

A good analogy to how I am trying to get this thing started,IMO, is taylor and andrew and josh (i think) starting up cardrunners; it was a team effort.

So any advice would be nice. I am not looking for anybody's money here. I am looking for a discussion on how to get your feet off the ground while minimizing the inevitable risk.

[/ QUOTE ]

Are we really talking about a few thousand dollars? I would think that the very act of incorporation would cost as much and strangers are unlikely to invest in your business without some sort of legal claim/protection. The best bet is to find friends or family members.

Btw, how do you start an "intricate" website that requires coding in several languages for a few thousand dollars? Are there a lot of outsourcing firms that specializes in building simple websites? I'm asking because I just can't see anyone doing any sort of quality work for that little money, unless it's really simple, easy stuff.

[RarocASP]

this would cost much more than a couple thousand dollars.

[john voight]

from my reaserch on digital point: http://forums.digitalpoint.com/ (great site for entrepreneurs BTW)

and a few related bids on a codeing site:

http://www.scriptlance.com/cgi-bin/freel...0&submit=Go

I have come to a conclusion that 2.5k would be about right for the beginning stages.

I mean we are not talking about a site that has thousands of vids like you tube, w/ tons of features. IMO this site would act like a porn site where I just manually uplaod vids that ppl can search/view, etc...

Now obv the goal would be to re structure the site down the line if it prospers. I have seen bids of up to $70,000 for youtube like clones, so I realize ther is a big gap btwn what my site would be in its infant stages, and what youtube is currently.

Judging from the responses I will prolly use mostly my money w/ the hopes of getting a little from close friends who too share interest in this type of project.

[Tupacia]

I'm the owner of a web business, and think you're making a few pretty significant mistakes:

1. You shouldn't be looking for a custom solution. Especially not as a beginning entrepreneur. Think of it this way: if you go the custom-made route your site will always be in "beta" mode as there are no other sites using the same software (no benefit of community-based support).

A cheap script that probably does everything you're looking for can be found here (haven't used it, but colleagues have and they like it): http://www.entertainmentscripts.com/social_features.php

2. Given your initial investment requirement and your financial situation, don't take on partners. The cost of drawing up the legal arrangements will be nearly as much as the investment itself. It seems like you're just looking for the advisement aspect of partnership as opposed to the capital contribution. There are many people out there (myself included) who would be willing to give you advice as you set up your business.

3. Work on developing your Unique Selling Proposition more. The "Youtube for X niche" model is overdone and destined to fail in my opinion. Without knowing your niche, you need to be thinking of ways to incorporate video as a part of an overall site that can be differentiated from the dozens of video-sharing sites. "We have lots of videos of independent movies" is not enough. "We are the only site where you can watch independent movies, and then listen to interviews with the directors and talk with other independent film buffs" is more along the right idea.

Hope that was helpful. I'd be happy to talk more if you want, just send me a PM.

[john voight]

ty vm Tupacia. I will keep you in mind as I think more about my ideas, and will likely contact you for more advice.

[maxtower]

It sounds like what you are looking for is an investor/partner more than a loan. If you just want a loan, look into prosper.com.

Finding an investor is going to be a lot trickier. For someone unknown to you to want to invest, you are going to need a business plan, etc. You'll probably want to go ahead and invest the 2Gs yourself. Friends and family are the only real option I can see here. Even they are probably more trouble than its worth, since you risk damaging a relationship over $1000.

My advice would be to get a parttime job if you are worried about the risks involved. Use that money to save your start up capital. Then if you lose it, you are only out your time.

[maxtower]

Sorry for the double post, but my other advice is related to your idea and not the question about funding.

A great idea on the internet does not usually become big without some decent marketing. Keep some room in your startup budget to pay for this. Many good ideas for sites have probably come and gone that you have never heard of. Most people find websites through search engines, and it can be difficult to get to the top of the search rankings.