Hello Mr Alex Vin,
The information provided is limited, therefore, my answer may not suit your
needs. First, take away the ego and look at your endeavor from a different
perspective. No one is going to give you money if they: 1) don't know you
2) don't see you at MVP (minimum viable product) so that they can see your
work, sweat equity, startup team coordination, traction (momentum) and
customer proliferation (not profitizing, but at least monetizing.
Otherwise, what's the value you have to offer an angel investor...TODAY.
$20K is not just, it's a lot of money. Again, take away the ego. You
startup team can be smart and passionate, but don't carry an attitude of
expectation, deservance or entitlement. Humbly present yourselves as
earnest and passionate entrepreneurs, regardless of how others behave.
Would you give $20K to a group of college kids from your university with
the question you posed?
If you are non-US residents, so what. A member of the startup team,
hopefully a co-founder must go to where the action is. Where on planet
Earth would you have the best success to make a presentation to a group of
investors who understand your industry? Would it be Silicon Valley, Hong
Kong or other emerging "venture" cities? To investigate, begin by doing
your homework on the Internet to find potential investors and investor
groups. Perhaps there are several in your city or nearby?
Find an investor in your neighborhood who: 1) understands your business, 2)
has invested in businesses similar to yours, and 3) will not break a sweat
or lose their livelihood because you fail, which happens to 90% of startups
in 5 years. A sophisticated investor invests in 10 - 12 startups knowing
that maybe one will make it. On the unicorn meter, the odds are much
higher. So, from an investors point of view, how well can you present your
team, product and establish a track record (monetizing) before they give
you $20K? Stock, so what. Promises have no stock value. What is the value
of that stock...TODAY?
Here are suggestions that two startups successfully raised capital, and
their endeavors are performing admirably after six years. By the way, it
took about 8 months for them to prepare themselves before they began
knocking on doors.
$15k pre-sale to open the doors.
$20k hard money loan on 20% interest payable in 15 months on a promissory
note. No prepayment penalty. It took $29,000 to pay the investor back.
$15k micro-loan from a local investor group, negotiate between 5 to 10%,
but avoid this route. Be stingy until you are monetizing, get down to 5%.
Angels had no equity, no partnership
Depending on the needs of your startup team, recruit a co-founder with the
expertise and financial ability to pay the bills. And, yes, if that expert
is outstanding, 30% could be fair. You are in a founder group. find one or
two experts in your business. Perhaps they will do the work in exchange for
stock, and the entire team can build value together?
In my experiences, never ask from family or relatives. Select investors
with experience at what you are doing.
Good luck in all your endeavors!