I\'m bootstrapping a SaaS business, and looking at doing consulting work to
get cashflow while my subscriber base is too small to support me.
My skills and experience are mainly in building and deploying web-based
software, but I\'m not sure it\'s a great market to be pursuing. Sure,
web-devs are in high demand, but AFAICT everybody wants to hire full-time
employees, and there are few short-term or one-off projects that would be
amenable to contract developers.
So, my questions to the group are:
Have you, or anybody you know, done this? Is it s viable strategy? Who
should I talk to about it?
I\'ve been in a similar situation: trying to fund my startup with consulting jobs.
Because I love designing for startups, that\'s the people I decided to work with. Tech startups are mostly looking to build an internal team, and are most of the time under-funded; not exactly the easiest market for freelancing. While I clearly explain how I add value to startups on a simple webpage, it\'s my local network that helped me the most so far: meeting entrepreneurs, publicly speaking, attending and organizing events.
I find working on interesting projects and with great teams nourishing and motivating; it fuels my creativity and helps me gain new skills. I\'m a big bootstrapping advocate, but there are times where consulting work can make you loose momentum on your own startup. Interesting work is hard to find, the balance is hard to keep, but it\'s doable. Good luck :)
266 Rue St-Paul Est #2
Montr�al, QC, H2Y 1G9
On 2013-02-10, at 1:29 PM, jeffkbennett wrote:
\'Implicit\' understanding is a dangerous game. My recommendation is to
structure it as a standard account payable and disclose it like any other
AP because it is the simplest solution. It also doesn\'t require convertible
notes and equity conversion which doesn\'t always work within certain equity
pool structures. Also, any chance to simplify a VC deal should be
capitalized on. There are really a large number of factors to consider, but
in most cases this is the Occum\'s Razor of solutions.
I\'m currently freelance consulting under Pairwise Group, http://pairwi.se.
We\'re exclusively mobile, which is an added opportunity to look across the
mobile ecosystem and make sure we\'re building the right bootstrapped MVP
product. At the same time I\'m building partner relationships, seeing who
would make great first customers, and potentially seeing if I can snag a
client who would fund the initial development of our Pairwise service in
exchange for an licensing agreement.
Most of my client work as come from personal referrals. I agree that while
some months have been super busy, others were fairly wasted trying to get
new contracts to work on.
Happy to chat more on the subject and share ideas. Ping me on twitter at
Agree with Micheal. The numbers you are taking about by the time you are at
VC stage are relatively inconsequential and it will just convolute the
process. Either maintain an account in which the company owes you money and
clear that account when that makes sense or bite the bullet, but I would
not recommend putting it forward to a VC.
I\'m interested in opinions regarding founder\'s initial investment and the
mechanics of getting it into the company. Specifically, if there are two
founders and they are both going to write a decent sized check to get the
business going; should they simply put that into a checking account and call
it a day or should it be more of a formal investment on convertible notes,
For reference the equity split is uneven, something like 80-20.
Consulting can be a viable strategy, but like building a product, you have to find where your services meet the demand and what credentials you can sell. Its a little different for me (im a former mckinsey consultant) and i have a consulting toolkit/ resume that bring a fair bit of credibility and ability to make an impact quickly. I use consulting to "angel" my own projects. Not the most scalable model, but also eliminates the fundraising cycle and helps transition consulting revs to business revs.
Biggest things ive figured out about consulting:
- try to find people looking for help and who have a burning platform and budget to fix. Nice to haves almost never really happen
- position a way you can help to solve the problem vs. just putting a resume out
- selling takes time. Leveraging aggregators to fill in gaps can reduce hourly rate but even out cash flow and build a track record
- beware sales overhead relative to billable hours
- most customers dont know what they want, so layingi out options is often the first step and a good investment (with a viable cusomer)
Iwouldnt recommend consulting as a short-term strategy. If youre goingto do it, you should be thinking in a 2-3 year horizon else find faster cycle time approaches with people who already have a sales pipeline
I\'m interested in the answer to this one as well. Just about to fund the
bank account and have heard different pieces of advice.
I\'m not sure I follow your answer entirely about expenses, etc. It sounds
like you are talking about expense reimbursement, but I\'m not sure how that
is tied to a convertible?
In terms of the original question, how would people suggest that money is
transferred to the entity? Direct investment? A simple note? A
convertible note? If a direct purchase, what sorts of shares? Common?
I\'d appreciate any insights.
Sorry, to clarify, I am not recommending not to disclose it. I am just
recommending don\'t negotiate reimbursement when talking with your VC.
On Tue, Feb 12, 2013 at 11:04 AM, Daniel Eberhard