Startups is it normal to have a small amount of informal debt (< $20K) and how do startups pay it off after a raise? |
- is it normal to have a small amount of informal debt (< $20K) and how do startups pay it off after a raise?
- Blockchain - boom and bust? Looking for thoughts & opinions
- What is your why? I mean like the REAL why. Why are you doing this?
- What does it mean when a company is a "million / billion dollar company?"
- Help with accounting questions brought up during raise
- I’m launching a peer-to-peer marketplace. How can I best coordinate payments between users and protect myself as the founder?
- Startup progression slow with my 6mo old.
- Funding with a Prototype?
- What metrics should I prepare for my chat with investors?
- Incentives to join a startup
- Imposter Syndrome
- When a VC-backed project/company is successful, how long does it take for founders to extract money from it and/or begin other/side projects?
| Posted: 02 Feb 2020 08:17 PM PST I am curious how investors deal with small amounts of informal debt that a company has on its way to its first raise or to market. Is this something investors would be familiar with? I realize that investors can negotiate whatever they want, including "we'll only invest if you get everyone to agree there is no debt" in which case people would have to agree there is no debt. Or investors might insist that the founder stiff everyone who helped without paperwork but on contingency. No paperwork = we insist you shaft them and lie and say you didn't have an agreement, they might say, though not in so many words. Might sugarcoat it. On the other hand this is a small amount of money. so is this something investors are familiar with? how do they approach/deal with it? [link] [comments]  |
| Blockchain - boom and bust? Looking for thoughts & opinions Posted: 03 Feb 2020 02:16 AM PST I've spent the last 3 years of my life working in the blockchain space. I used to live and breathe this thing, like a drug almost. I was that biggest believer and advocate of it and truly believed in it's potential. But I've since changed my views on it, completely left that behind and moved on to other things. I got a bit tired of the whole space honestly. There was too much "money-grabbing" stuff going on, and not that many projects actually making it to prime time - lots of "we are going to change X", pretty much nothing of "we are actually changing X". With that, an amazing thing also took place: my vision became much clearer. I no longer look at stuff and say "oh yeah, you can definitely use blockchain there, and you could totally change everything and anything!" I've become much more sceptical about it, to the point where I actually say that blockchain is probably the worst idea, and "... you're just looking for a problem with your solution" (which makes me wonder how cringy I probably sounded to some people a while back). Anyway, point being: what are your thoughts on the technology? Do you actually believe it has potential, or do 99% of you don't even care about this, and I lived in an echo chamber for the past 3 years, only socializing with the 1%? [link] [comments]  |
| What is your why? I mean like the REAL why. Why are you doing this? Posted: 02 Feb 2020 11:05 PM PST Honestly, I'm down this path because I know where I was going to end up in ten years time... all I had to do was look over at my boss. I wanted to have financial freedom, do more of the things I enjoyed, make a positive difference in the world through my actions, maybe one day start a family and be able to give them the best possible future possible. A lot of the time entrepreneurs talk as 'the business'. "We're doing this to bring XYZ product into the market." "I'm trying to be my own boss and make six-figures a year comfortably." But what's your real, egotistical, selfish "why"? [link] [comments]  |
| What does it mean when a company is a "million / billion dollar company?" Posted: 02 Feb 2020 07:12 AM PST What is the most common definition of a million / billion dollar company? Does it mean your company's lifetime sales is 1 million / 1 billion? Does it mean you've gotten investments that value your company at 1m / 1b? Does it mean you have a yearly recurring revenue of 1m / 1b? [link] [comments]  |
| Help with accounting questions brought up during raise Posted: 02 Feb 2020 11:35 PM PST Hi All, I have a few accounting-related questions my team's been discussing internally, and if someone can help answer I'd be very grateful. This forum's been my go-to for reading/commenting but this is my first post here. Here goes: 1. How do you handle the company owing a founder or co-founder money? Does it make a difference if the founder/co-founder funded the company using a personal credit/debit card because the corporate one is max'd out, in order to pay off a corporate obligation? In this case, what we've done is put the line items on Quickbooks as liabilities, along with any relevant receipts/invoices and corresponding bank statements until an accountant decides what to do with them. Hopefully this is being done right :/ Note: Any fellow first-time entrepreneurs even remotely thinking they may get investment in the future, please don't put off doing proper accounting!! Product is 100% the main goal, but nobody will touch you with a 10 foot pole if you don't have your books in order. It'll be looked at as a character issue, and is one of the reasons first-timers get hammered with their valuations vs serial entrepreneurs. I was trying to do 3 years of non-existent books for weeks, and crying blood the entire time. Please learn from my mistake. 2. How do you handle shareholder capitalization if one founder pays another technical co-founder (with much less equity), a "stipend," an amount that's considerably much less than market rate? Is this "stipend" payment labeled as shareholder capitalization or does it become an expense? I know some really shady stuff can be done here to make the business look more attractive to an investor but that's totally not the case in this scenario and is made clear by the fact this co-founder works full time and market rates are well known for the labor. 3. How do you categorize and value startup technology that has been built into a complete, ready to sell application but hasn't been sold yet at all? Been working for almost 3 years building the tech and it's definitely pre-production. Normally startups don't bother putting a value on these assets because they don't qualify for the definition of "pre-sale but production-ready" or, when they do, it's after they got investment and it doesn't stay that way for very long. But in our case, we have a B2E application so development costs and time sink are quite high and this in addition to our self-imposed requirement to stay in "stealth" for various reasons, our ramp up on marketing and networking efforts need to be completed before launching into the market. And this will take some time. I'll probably have finished securing investment before launch, so if I can put a $$$ value on this it'd be huge. I know some big firms don't bother appraising their tech assets to avoid scrutiny or the appearance of inflating their asset value, but this would be our only tangible asset with a dollar value (aside from our patents) so I figured it's worth pursuing this question. Ideally there'd be a fair way of appraising these assets internally and having a qualified firm sign off on it. Right now it's not "fair" either to have this simple put as an expense when we clearly have something that fits the definition of an asset; the only thing preventing me labeling it as such is attaching a fair/conservative value to it. To put all this in perspective, we've been told our tech could really make insane amounts of money with just a single contract (an IPO-worthy amount of money) so I'm hoping there's an easy/affordable way to at least put a 7 figure value on this, which is probably the replacement cost of just the designs. Unfortunately though, thus far my entire team' been particularly let down at the lack of value given to sweat equity so I'm quite dubious I'll be able to get even a 1/10th of fair market value for the tech (which has been called an "intangible" many times to my dismay). I appreciate any consideration given to these questions. I'll be sure to pay it forward with any knowledge or advice I'm qualified to give :) Many thanks in advance! [link] [comments]  |
| Posted: 03 Feb 2020 01:20 AM PST Hi everyone and Im sorry that this question is so commonly asked Im starting a peer-to-peer marketplace of goods and Id like to find some way to monetize the marketplace. Ive been looking around at payment methods (Paypal, Stripe, Braintree, etc, etc, etc), but there are many nuiances and I dont know how best to handle this:
How can I best do this? US seems easy...but Europe? South America? Mexico? Australia? This seems to get very difficult. If I integrate Paypal goods&services, will I be potentially on the hook for reimbursing/payments for scams? How can I best protect myself as the marketplace founder? Thanks!!! [link] [comments]  |
| Startup progression slow with my 6mo old. Posted: 02 Feb 2020 07:44 PM PST Looking for advice from those of you who started a successful business with children. I've been trying to start my business and it's been doing a lot slower than I want. I have a 6mo son that's taking most of my time outside of my day job. Not that I'm really complaining, because I love being a parent and he is my world. I just want this business to start and be successful so I can get my debt paid off faster and actually work for my dream instead of someone else's. Do any of you have any advice? How do you keep momentum when you babies needs are first. Or is this a "it is what it is" situation and I'll get better as he gets older? Thanks!! [link] [comments]  |
| Posted: 02 Feb 2020 08:59 PM PST |
| What metrics should I prepare for my chat with investors? Posted: 02 Feb 2020 01:27 PM PST Happy Sunday everyone. I'm really excited to launch my MVP in ~3 weeks time. I'm building a platform for baby boomers to answer questions & compare responses about topics of interest (nostalgia and home decor are two starting topics). It's a standalone mobile-optimized site and works very well with Facebook, where the majority of our users are. It will be easy for users to access, share and create an account within their FB. Our two main prospective revenue streams will be 1) selective partnerships with businesses that target boomers 2) premium membership for exclusive content; however, we aren't testing the viability of either of these with the MVP. I'll begin chatting with angel investors next month and want to showcase all the progress we've made with our MVP. We will have a lot of data but I'd love some feedback on anything that I'm missing. I'll be able to show: cost per click link from FB ads to our platform, # of impressions, % of people who register, amount of time spent on platform, # of shares, % of users who share, retention, & more. My question: for those who've raised money, what are some key metrics I should provide that will make investors realize that this is a good business to bet on? I'm really trying to leverage the fact that boomers have a lot of time to spend and a lot of money to spend, which makes going after this demographic smart, but unsure if our MVP is able to demonstrate that just yet. Perhaps, time spent on platform + engagement with fake ads we put on platform? Or, a button that says "Interested in premium membership?" and see how many people click on it? Just trying to be creative here. Thanks! [link] [comments]  |
| Posted: 02 Feb 2020 03:59 PM PST Hi there, I have been consulting to a start up recently, and they've extended an offer for me to come on full time. I've know them for a few years, and the stars have finally aligned to work together. I have a competing offer from a very well known company where I live that is paying about the same. I think at the same salary level, I should join the well established company as the recognition on my resume is big, and it's a pathway to a number of well known organisations down the line. Once you're in with this group, you can get a job anywhere. The startup however is fun and chaotic and growing quickly, so it's no easy decision. My question is, what incentives can I ask for from the startup to sweeten the deal. I'm thinking:
Any other ideas? [link] [comments]  |
| Posted: 02 Feb 2020 10:32 AM PST I am just venting. I know its super bowl Sunday and I should be relaxing. Unfortunately, none of my teams are playing and I have too much on my mind. I am now going through a specifically challenging step in the project where I have to get into a prickly portion of the startup involving licensing and applying it to the platform. I am out of my element and it is reminding me of how far from the issue I am for the core feature of the startup. I don't have the cash to hire an expert and people in the field are likely not interested, yet, in taking part in contributing to this venture at this point. At any rate, I think I came up with a solution but this whole thing has made the past 2 days extremely stressful. I am glad it's done. I will now go on a run. Happy Sunday. [link] [comments]  |
| Posted: 02 Feb 2020 12:23 PM PST When a project/company is successful and gets investment, in general how long does it take before founders are able to extract money from it and/or begin to spend time on other, side projects? (Other businesses.) Assuming all goes well. Also do some founders not want to lead a company for very long, is this reasonable? (Just enough to get to market and prove the company, and then leave it in more capable business hands.) [link] [comments]  |
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