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That's fair, but at the same time, I'm hesitant to agree, on a few ground- 1) You're certainly right that banks have nothing to go on. My credit isn't amazing,
by cirroc 19y ago
That's fair, but at the same time, I'm hesitant to agree, on a few ground-
1) You're certainly right that banks have nothing to go on. My credit isn't amazing, but its certainly decent enough that I could probably manage a small loan from the banks on personal credit alone. It would provide a few months float money, at the least.
2) You've argued heavily before that there needs to be an element of becoming personally committed[1], providing motivation. Having a Personal Loan over your head is certainly one way to do that.
3) Are there other options? Raising Angel money would be more difficult for us that for some projects, because we're not as Sexy as we could be.. We sent in a yCombinator proposal that was very ambitious, but were rejected, so we scaled back to what we thought we could achieve on our own.
We're doing a pretty decent job on it, but its not going to be the next Google, or even the next Scribd. Most Angel Investors seem likely to want to back a sexier horse, so to speak.
We do have a dedicated group of users waiting to sign up for paid subscriptions, and we know we could hit profitability reasonably quickly, but how do we get from here to there?
[1] http://www.paulgraham.com/die.html http://www.paulgraham.com/die.html
- jsjenkins168 19y ago1) I'm sure you can find a way to get some sort of bank to lend you money regardless of your credit rating. There are plenty of banks in the business lending money in high-risk situations. Getting the money probably isnt the problem. 2) I see your point, but the problem with being in debt is that it is something you don't have control over or can easily fix. Having a collections agency call you all of the time threatening to repo your personal possessions is not exactly a positive motivator either. I would rather run out of money and be piss poor than have an unpaid loan over my head, personally. 3) Raising angel money is extremely hard I'm finding... This is a huge benefit of YC, IMHO. Guy Kawasaki said in one of his books that you are more likely to get struck by lightening than land VC funding. That quote is not as ridiculous as I once thought.. Thats awesome you've got dedicated users, keep it up. Aim for the sky though, dont tell yourself you wont be the next Google b/c if you think that way you surely wont be.
- deleted 19y ago[deleted]
- breck 19y agoFour words: zero percent credit cards.
- Tichy 19y agoWhat if you fail, how are you going to repay the debt?
- cirroc 19y agoPlan A) Don't fail. If we are able to bring in a moderate level of revenue, we could probably cover the costs of repayment, even if we had to halt further development. Plan B) Suck it up, and pay for it for the next 5 years. Obviously, this plan sucks, but it's better to have tried, isn't it? I'd love any other ideas for financing- We want to make this happen; I'm just looking at it, and seeing a loan as the most achievable option. I'd love to be wrong ;)
- jkush 19y agoFinding angels isn't as hard as you think. Someone you know or someone your founders know has a connection that can be used. Find it and use it. Angels tend to know other angels, so all you need is to find one. Even if that investor doesn't want to invest, there's a good chance they'll be really excited for you (having been there themselves). If they don't help you out financially, they might connect you with angels they know. The short version: if you already have traction and are passionate, find an angel.
- puppetsock 19y agoYou're doing a software startup, so your costs should be minimal. You should be able to cover these costs by consulting for a few months at the beginning, then living off of this cash. Just move in together in a cheap apartment, buy food in bulk, etc. It only takes a couple months of consulting to save up enough cash for a year.