I am the founder of Amworx, an online reverse auction platform for the automotive industry, based here in Texas. Essentially its a place where dealers state-wide compete for your business. Buyers submit a request, it then gets sent out anonymously to every dealership in the state selling that brand. The dealerships use our platform to submit competitive bids in response to their competition. The buyers receive a list of blind offers only giving them the vehicle specs and the distance away, they must choose one and pay to get connected. Once the dealer accepts, the connection is made and you (the buyer) have just found the best price in the state at any given moment.
After winning a TechStars business competition we began working on this project full-time, validating our customers and launching a low-tech manual beta December 2016. Our response from customers was AMAZING! In only 2 weeks we had signed on 400+ new-car dealerships across the state (that's over 1/3 in the state, Texas being the 2nd largest market in the US). Our consumers were seeing an average savings of $3000 less than the largest competitor in the space. Our dealers were spending 1/3 of the cost as our largest competitor while getting better quality leads (of all the buyers who paid to connect, we had 100% follow through with the purchase in under 24 hours, an EXCELLENT surprise!)
Now to the issue. We have developed full prototypes of the entire process, wire-frames, user-flows, etc. We also have an excellent business plan that goes through all of the details including other sources of revenue as well as our expansion and go-to-market strategy. We have been approached by some of the largest VC's in this vertical but they are only interested in getting in on series A and beyond.
We are at a point where our manual beta cannot handle the load of customers, it is too time consuming and leave room for human error. We are seeking to raise funds to build out our automated platform and re-brand (which we have already acquired the name, url and trademark). We have been reaching out to angel groups but they are slow to respond. We lack the CTO component of our team to build out the full platform in house leaving us to use an outside development firm (which costs money we don't currently have).
Please if anyone has suggestions, we are open. I know if we wait too long, someone else will try and be first to market. Any help would be beneficial.
Dear Brett, you need to acknowledge few things before you put more time into finding a rare "CTO for equity", such as:-
1. Even if you've a CTO, he might not be able to do all the development. There is a front end, backend, database, Design, IT infra and much more and software development isn't a one guy job, so you need a team even when you've a CTO.
2. Angels or VCs don't invest in pre-launced products (not at all in the kind of market we are having these days). You'd need to develop it anyhow.
3. A good CTO who can do "Most" what you need is already engaged somewhere for a hefty fee, or pulling a big salary from some regular employment. What you can commit him (future "possible" profit) in next 2 years, he must be getting it right now so how would you sell him your stuff. As @Karen said, it's almost impossible.
Now, following are your options:-
1. Hire Cost-warrior freelancers (or part-timers) via upwork or freelancer, and decide only on the basis of cost. or
2. Hire an App Development Company like the one I own, and decide on the basis of trial work, cost, accountability, and professionalism.
Yes, a good development firm can offer you a lot of cost advantage along along with quality and accountability, and you can use them for longer term, we love to have long terms associations with right customers and this approach makes sure how much effort we can put in your work.
Cost wise, what a local dev firm in the US can do in 50 K would be done in 15 K or so when working with us. And as I said, we offer a FREE trial without obligation before you hire us, and yes, we play the role of CTO for startups, a "Team CTO" to be precise that would do not only development but also does research, assists in cost related decisions, in marketing or fund raising strategy and what not. We even attend investor's meetings for our customers.
So try this option, and check what I say is true on our site www.agicent.com. I'm happy to speak via PM.
You are in the early stage squeeze. I'll tell you my story. When I first began to think about how to build my platform (I'm not technical), I had other non technical entrepreneurs, who had been through the streamroller, tell me it would be hardest thing I would ever do. I didn't initially believe then. How hard could it be? I had raised millions of dollars in another field and had a lot of success. Here's what nobody will tell you. Finding a CTO to work for equity is like a needle in a haystack. If you have technologist friends that is your best bet. Otherwise, I've found that technologists tend to get offended because they think you are trying to take advantage of them. I wasted a good 9 months trying to find a equity-based CTO. I'm not saying it doesn't happen for people, but it didn't happen for any of the people I knew, unless they were friends ahead of time. I wasted another 6 months trying to find white label solutions that would work, but most aren't advanced to give you the unique functionality you probably need. Angels don't want to give you money until you have something built, neither do VC's. Sometimes you get lucky and find an angel you just hit it off with and they get your idea, and they will give you seed money. I know people that happened to, just not many and it seemed to be luck. A couple of suggestions: 1) your idea is pretty common sense: raise some money on kickstarter if you can and go on Upwork to find a full stack developer who can build it for a good price. I have some suggestions for you. Software development is a service. I had people wanted to charge me $300,000 for the project and some who wanted $40k. People charge what they think they can get: you should look for the least expensive who comes highly recommended. 2) I lived in Texas for a while (Austin and Dallas) and was in the start up scene. I love Texas but what nobody will openly admit is-- there is no (little) money there. Having moved out to California and spending some time in Silicon Valley, it's obvious that's where the critical mass of funders are, so put in some face time. .... I wish someone would have told me these things early on, I would have wasted a lot less time. Happy to talk privately.
What a great place to be. You may want to offer equity for a top quality CTO since that is such a huge part of your business model and processes.
I have a friend who is now developing two startups as their CTO and managing a string team of technicians. He is young, and left a top C level position in one of the world's largest multinational IT companies because he loves Entrepreneurship.
Ping me at email@example.com if you want to know more and I can connect the two of you.
All the best,
Congrats on all the progress. Incredible.
I would definitely offer equity to a CTO to join the team. He/She will play a crucial role in the development and growth of your business. I would not rush into it but would look for someone that understood the vision you have for Armworx, both technically and strategically.
This is a key role for the success of Amworx so this will be a key team member that investors will want to be in-house and committed to its progress.
Martin, I always appreciate you feedback. You are always direct and to the point which I admire.
We do have certain key aspects that will set us above the competition which is protectable IP. Since we do not have the funds to protect it at this stage we have yet to disclose the details openly.
There has been much interest from Angel groups in which we are presenting to over 5 just next month (hopefully more by time April comes around), we just hope to move a bit faster by starting development of our product. Having a working product will allow us to focus on growth and sales, which would help validate to investors that this is a scaleable product.
I do wish to keep in contact with you as we develop and grow if nothing more than for advice from someone I trust will give honest feedback. Hopefully all has been well on your end; I look forward to building out something more solid and concrete that maybe even you would find this an intriguing investment opportunity.
Being in Texas - have you talked with Capital Factory in Austin? As advanced as you are, it would seem they would love you and they have an active network, along with a small fund. If you have not, contact Gordon Daugherty and see if they have interest.
lets connect, need to know what exactly you looking for.
Thanks Rob! I will take you up on that offer.
We have been looking for a CTO but it has been so hard as many have their own projects they are pursuing or a 100K+ job that they are not willing to part with for something as fluid as a startup.
did you consider equity crowdfunding? If so, and you are interested contact me.