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Ask HN: If a startup is looking for investments is because can't generate money?
Hi there! I am Patricio, from Argentina, student of Maths, web developer since I was 16 and founder of a little (not profitable yet) startup.
Lately, I have been wondering about a fact that it's almost the main character in everyday news at Hacker News. A lot of startups are looking for investments, but I ask why they need it.
If you open a store in your street, nobody is going to invest for you (well, it is not usual at least). You are still risking your old job, and going to have hard days in the next days. In fact, you are investment a lot of money on it too. It's the same when you create an startup on internet, you risk your old job if you quit it -it isn't always the case-, and you are going to have hard days soon. But better, you don't have to pay a lot to start it. Only a domain, a hosting and use your talent. But you are looking for a lot of money and even before you start.
I don't understand that very well. I think I am missing a point here but I can't find it. I only deduce that if you are looking for investment it's because your startup can't generate it, even after months.
- a5seo 14y agoIs this question serious? There are markets where you simply must invest a lot and get big fast (acquire users), otherwise you'll get run over by competitors. The only way to win is with VC. Read up on first mover advantage and network effects. In fact, just buy Varian's Information Rules.
- timmm 14y agoCorrect there are ideas that require critical mass / communities --> capital expenditure in order to be valuable. BUT the model should be entrepreneurs who are wet behind the ears should stay far away from those ideas. Bootstrap something that doesn't require those difficult prerequisites in order to be successful and then use the money from that to perhaps go back to your gazillion dollar idea.
- paulhauggis 14y agoIt's more than just the money. VC many times have connections in various industries that can help you succeed.
- cmwelsh 14y agoThrough investment you can align your business with powerful people and organizations. You immediately gain allies with clear intentions to see your business succeed.
- iworkforthem 14y agoRather if the startup has a viable product or service, it should be making money selling it to people who has a need for this product. - I guess this is only applicable at early stage of the startup. Scaling a startup is very different.