Fundraising · Startups

We don't want equity sharing but we need about $3K/monthly expenses! Any other options for funding??

Alex Vin CEO at uDouble

July 26th, 2016

We are an early stage startup in a stock market arena with a limited budget and we want to develop themselves. Angels are so greedy, they want 30% - 50% just for $20K! At this time we need about $3K each month for financial market data. Is there any other options for funding??What should we do if we are non-US residents?

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Lisa CFA founder Perspicua Strategic Partners

July 27th, 2016

First you should reach out to the provider whose data you need to see if they have a program for working with startups or if they have a development or test data feed that you can use. Try reaching out to their business development team - that's often the group that maintains relationships with the startup community. You should also look into FinTech Sandbox (fintechsandbox.org).

Martin Omansky Independent Venture Capital & Private Equity Professional

July 27th, 2016

You are either in the wrong country or talking to the wrong angels. And you are probably not going to meet your objectives with only a $20,000 investment. Also, if you don't want equity sharing, how about profit-sharing? Such a thing is possible in the LLC corporate structure. Please note, however, that investors will not understand your reluctance to share equity. They may even think you are naive, ill-informed, or crazy. My suggestion is to get a good corporate lawyer and take his advice. Sent from my iPhone

Adam Pressman

July 27th, 2016

If you're offered $20k for a third to half of your company that means they think it's worth $40-$60k.  If you agree, I would sell them the whole thing and do something else.  If you don't, I wouldn't sell any equity.   If you have customers, perhaps offer a percent of the profit on every sale instead.  If you don't get some.  If you have a great way to get and keep customers, investors, the kind you want, will find you. 

Svetlana Parleva

July 27th, 2016

Hi Alex, 
The simple answer is that there is always an alternative and if you don't want to give equity,  you shouldn't, incl. when you are not USA citizens.
There are few great start-ups programs, forums and incubators which don't ask for equity at all. 
Drop me a message, if you are still not finded your match.
Kind regards, 
Svetlana. 

Melissa Chiou

July 27th, 2016

Patreon.com - subscription based funding

Alex Vin CEO at uDouble

July 27th, 2016

Oh thanks Lisa, never heard about them, useful advice!

Miguel Hidalgo Mighty Micro-Multinational Entrepreneur

July 27th, 2016

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! Miguel Hidalgo

Angela Giglia Award-Winning Creative Idea Person | Communicator | Revenue Spotter | Human Connector | Digital Media Producer

July 27th, 2016

Hi Alex, Yes there is! There is a BRAND NEW social crowdfrunding site that revenue shares with the project creators so along with donations the company pushes up to 80% of their revenue shares back to the project creators. The site is officially opening sometime during the week of August 1st and that's when they will start charging credit cards (it's been free during beta testing and people have been putting up their project pages and building out their network). How it works is you get paid for connections $50 per month for a personal connection and $4 per month for a viral connection. When they start charging credit cards, I'll be receiving approx $5k per month. I have 10 personal connections and over 1000 viral connections from people who are around me. I've already gotten donations to my project and the company has already paid that to me. IF you are looking for VC's SmashFund is putting this in place and will be available possibly by the end of the year. SmashFund will be a global platform opening in Australia and India next quarter. Here's more info if you are interested. www.smashfund.com http://angelagiglia.com/smashfund-2/ (listen to the interview with Ruth Hedges) And if you feel this is right for you, please join my crowd. http://smashfund.com/signup/via/6270517 Please feel free to contact me if you would like more info. Best, Angela

Michael Heiligenstein Marketing Manager

July 27th, 2016

Are you in a position to put personal money into the business? I agree that trying to negotiate with the provider is an important first step here. But you should also be prepared to put some of your own money towards your businesses's success.

This is why saving money and getting your personal finances in order is one of the most important steps when preparing to start a business, and why I strongly encourage new business owners to plan on covering their first year of business expenses out of pocket. If you have an IRA, one option here is rollover for business startup financing, which is a method for using your retirement account to run your business. Good luck.

Martin Omansky Independent Venture Capital & Private Equity Professional

July 27th, 2016

We recommend two years, but your point is valid. If a founder does not have his/her own resources, we suggest that they don't go into business in the first place. I suppose this is a bit "old school" but still generally correct.. Sent from my iPhone