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Ask HN: My startup is running out of fund. What should I do?

• koyanisqatsi 4y ago
  Shut it down and move on.
  • whentojoin 4y ago
    My cofounder tells me I am guilty if I don't stick with him keep building, even if it is something else. He quit his job to join me, and I am wasting his years of life if I quit. I am wondering if I am being a bad person.
    • mudrockbestgirl 4y ago
      You are not a bad person because of that. It was his decision, and joining an early-stage startup comes with exactly the kind of risks you are describing. If he was not aware of that, that's completely his fault for making bad uninformed decisions. The fact that he tries to make you feel guilty is a huge red flag. Do you really want to work with that kind of person in the long term?
      • whentojoin 4y ago
        That's the thing I am pondering about. He tells me if I don't keep do a startup now the next time I do it will be like 5-10 years later. I will have kids, etc. But I know say if I take a break of say 1-2 years I can start a new startup, whether I have a family or not. I might even do some side projects even before then and see how it goes. I am wondering if he says that out of his self interest or for me.
    • andirk 4y ago
      He can get another job. I feel his and your pain, but give me a break.
    • naet 4y ago
      He can hire someone to replace you if he thinks it can succeed. Or continue to work on it on his own without you. He sounds like he is being a bad person if he's keeping you there against your will or using guilt as a motivator. You are vague about what your startup is or what the issue is preventing your launch. If it's ready, just launch it on zero budget and see what happens. If you need more money it isn't ready. Can it stay in "zombie mode" without you working on it actively? Why or why not?
      • whentojoin 4y ago
        I am intentionally making it vague to protect the privacy. But the business we are in require millions of dollars to launch (after the code is ready). Without that much of money, the product provides 0 value. --- He can hire someone to replace you if he thinks it can succeed. Or continue to work on it on his own without you. >> You are spot on. I am not stopping him from doing that. This makes me feel much better. Thanks.
        • HWR_14 4y ago
          --- He can hire someone to replace you if he thinks it can succeed. Or continue to work on it on his own without you. >> You are spot on. I am not stopping him from doing that. This makes me feel much better. Thanks. If you want to go this route, letting them move on while you do something else, you have a major consideration. You own a giant chunk, maybe even a majority, of the equity. That can make it hard for them to be motivated, hard for them to make legal decisions, hard to get investments, etc. Consider selling (or giving if you really think it is worthless) enough to the partner you are leaving behind so that they can succeed. Or just make it easy to dilute you (I assume it's a tax question which is better). If you do, feel free to make it fair to you as well. Maybe you get to use some code in another project in a dual-use situation? Maybe your cofounder vests the chance to buy your stock over a few years so he doesn't just cut you out and then pocket everything as it dissolves? Retain a fair amount of equity for the work you already did.
    • joshxyz 4y ago
      well you sold him to this and you're the first one considering the idea of backing out just because things didnt go as planned. maybe he's all-in on this already thats why he said those things too. there might be other ways around this, there moght be still time left to correctly operate in this scenario.
• ohitstyler 4y ago
  You could work part-time to help support project. But you need a new opportunity to pay your bills etc.
  • whentojoin 4y ago
    It needs millions of dollars to launch the product though.
    • jasfi 4y ago
      Is that all marketing cost? What exactly makes up the millions of dollars? Because there are bootstrappers that launch successfully by growth hacking, although that is admittedly difficult to do.
      • whentojoin 4y ago
        I left it intentionally vague for privacy. That is the money need it to make the product valuable to users. Without it, the product provides 0 value to users. Let's say there are many companies in this space, all spend at least that amount of money to launch. $0 of these millions is on marketing.
        • _448 4y ago
          What are you launching, a spaceship with millions of dollars? And how is sharing what your product is a privacy issue? This all really sounds odd to me.
          • joshxyz 4y ago
            understandable if industry is defense or deep tech, but damn if external funding is their only option to move forward, theyre really fucked.
        • GianFabien 4y ago
          If you stay on your current course, how and when are those millions going to materialize for your launch? Since you are competing with existing companies, how are you different enough to be attractive to investors? The fact that you haven't been able to raise any investments to date suggests that those who passed on the opportunity could see things that you are ignoring.
• andirk 4y ago
  My favorite sticky floor local dive bar shuttered at first blush of the pandemic. We've all been waiting with promises of an opening around the corner. I finally got the skinny: owner took the moment to do much needed deep repairs, gutting the whole place. But he needed more money to get it back up and running. So he took out a loan, and then another. Now it's not finished and he can't get any more financing. Wtf is he going to do?? I say open the bar in the bar's parking lot is what. Similar to you, you ran out of runway and have seemingly nothing of substance to end users or investors alike. Take what you can from your code and pack it up. Keep your network of smart people around you in good favor. This one is done. Try again. Maybe a very similar product or wildly different. No zombie'ing! Your time and life are valuable. Use it as such.
  • whentojoin 4y ago
    That's really good advice. I only have 1 life.
  • iancmceachern 4y ago
    This is the best advice. Do it before you've burned bridges trying to keep this one going.
• tsol 4y ago
  > My cofounder is telling me if I don't keep working on this startup (using the money out of my cofounder & me's pocket after the company die) You should establish what that would actually look like. How long would you guys realistically run like that? What would you need to accomplish to make it work? How much time would you have to accomplish your goal?
  • whentojoin 4y ago
    For me I want to move on something new. There is no point on saving something would almost certainly not work. But I am feeling guilty. He left his job to join me, and we are cofounder for a couple of years. He told me I am wasting his time if I don't keep working with him. That makes me feel very bad.
    • xupybd 4y ago
      He could be wasting his time too. If he's playing on your emotions that's just manipulation. What's best for both of you? Enabling him to waste his life chasing his white whale is not the right thing to do. Especially if you end up collateral damage on the way. If there you think you've got the drive to make this work then make it work. If not move on.
      • joshxyz 4y ago
        they should immediately put stop into this blame game and really address the underlying issues: there is no money coming at the door and the lights wont be kept on if it stays that way. if you cant raise some funding, close some sales.
    • blacksoil 4y ago
      To keep working without clearly defined goals and deadline is a waste of time as well. There needs to be a clear KPI as to what product features should be completed by when, as well sales plan and concrete sales KPI to hit. After that, use the money and resources at hands to give them a shot. After the deadline is reached, sit down together, evaluate, and decide what's next. The expectation has to be very clear (I.e to make X amount of profit within Y months) and it should be evaluated very objectively to avoid any hard feelings
• throw03172019 4y ago
  I’d always wonder if the company/product would have succeeded if I quit before launching.
• Melting_Harps 4y ago
  > What are your guys thought? Former fintech co-founder: I boot-strapped (VC and incubators expressed interest but wouldn't give term sheets because of Bitcoin's 'gray zone' reputation) and with this current tech-apocalypse afflicting the entire Industry I fear you will have a very hard-time raising anything without showing revenue right now. The fat is being trimmed even on the most established of companies, and I fear you will have to enter the work-force if you are in such dire need of money. > My cofounder is telling me if I don't keep working on this startup (using the money out of my cofounder & me's pocket after the company die), then I am being guilty to him, guilty to current investors and guilty to employees, because I am not all in. I self-imposed this on myself, and to be honest had I not done it would have never gone anywhere, whihc had a cascade of effects downstream to the entire cannabis Industry; but ultimately I personally feel I paid too high a cost to do it in the end--it was my most daunting Pyrrhic victory which seemed never ending until I decided to step down and go Corpo for a bit. As someone who went through this and had a decent exit I think that if you thought it's worth doing, you probably wouldn't need external validation, but if I were you I'd really consider what your physical and mental health is worth to you because you will be sacrificing both for the foreseeable future. I'd say start with what other skills can you leverage in this market and start from there, and have a brutally honest assessment with your team as to what it will take to keep the lights on. > But the business we are in require millions of dollars to launch (after the code is ready). Without that much of money, the product provides 0 value. Why? Are you having to comply with lots of legal issues/regulations in various markets? In my time friends were getting sent to prison for non-compliance of nebulous KYC-AML laws and were deemed money transmitters when it was classified as property and not money depending what agency you asked in the US; my question is why would you enter a market that requires that much in run-way and think that this is a viable option let alone that could succeed given the current incumbents? Fintech's appeal is in how well it scales with limited resources, which ultimately is the only thing that allows it to compete with legacy payment processors like Visa/MC who dominate the Market for a reason.
  • whentojoin 4y ago
    Why would you enter a market that requires that much in run-way and think that this is a viable option let alone that could succeed given the current incumbents? >> To answer your question, we enter this industry as completely new-comer. If we know what we know now, we agreed we should have never started this business in the first place. Also we have 0 founder-market fit, and that should be a big reason why no VC funds us.
• vaidhy 4y ago
  Just remember that doing a startup is risky and all of you took that risk - you, your cofounder, your investors and your employees. Sometimes, risk pays off, but most of the time, it does not. Playing the guilt game just makes is an emotional blackmail and you need to learn to recognize it as such. You do not have to all-in in something you do not see a good chance of success. Knowing when you fold and walk away from the table is an equally important skill.
  • whentojoin 4y ago
    This is the first time I encounter that. The more I think about it, by "you have to all-in in something even if the company runs out money" standard, I suspect even majority of unicorn founder won't start the company in the first place.
• randyrand 4y ago
  Why do you need so much cash to launch?
• _448 4y ago
  May we all know what this startup's product is? If your co-founder really believes in the product then do something that one of the co-founders of RethinkDB did, keep working on the product as a side-project. Nothing stops you both from working on it as a side-project, even open sourcing it could give it a new life and open up new opportunities.
• janstice 4y ago
  Can you sell the whole things as a ready-to-launch product to a funded org that’s either in the market, or wants to be? If neither you nor your co-founder have the multiple millions to launch, if you drag the runway out by self-funding (and taking on a bunch of consumer debt), I suspect that in 6 months time you will be in the same position you are now, but on the verge of bankruptcy (or over the edge…). You have no winning position by continuing the same path you are in.
• demarq 4y ago
  If you are not happy working on something, the only guilt you should have is that you're life is being spent on something that doesn't make you happy. You live just once.
• joshxyz 4y ago
  if i'm in your position, i would stop everything i'm doing and would spend my time doing pre-sales and closing deals. sales fixes a lot of problems, and at this point it's also your next ticket to getting your next funding: by creating and retaining some traction in the most ramen profitable way.
• definitelyhuman 4y ago
  Tough situation, clearly lots of emotions which is understandable. As others mention, startups are high risk, don’t let cofounders manipulate your thinking on that. Re:launch cost & funding, I’d ask if you actually need that money. Can you get any customers with what you have? Investors are spoiled for choice, and can afford to make startups hit higher burden of proof before funding. Regardless of market challenges, showing sales & fit is a big deal. Getting that could change your fortunes. If you do shut down, take pride in what you tried to do. Be sure to do a post mortem and take the learnings with you in your career. Startup or not, you’ve done something very hard that very few try. It will serves you well as n future work
• foobarbaz33 4y ago
  > My cofounder is telling me if I don't keep working on this startup (using the money out of my cofounder & me's pocket after the company die), then I am being guilty to him He is not able to accept he fell on the wrong side of risk/reward. Failure is a norm for startups. End it. He needs to take responsibility for his decision of taking on risk. Not blame you for it, as you are in the same shoes as him.
• hnaccountme 4y ago
  Don't you have to get certain certifications/audits done before you can launch a fintech product?
• firemelt 4y ago
  what is ur current position and % shares in current company? is that an invitation to died together?