Best way to raise initial funds?

[USMC_1833]

Hello,

I am starting a pretty major project here in the next few weeks, and was wondering the best way to raise funding for it? I have a full business plan, with details on how to develop the site, including methods to maintain revenue and everything, but this is the first time I am starting a project that would require more than my initial investment.

Granted, the investment would only be around $5,000 overall for the development and advertising of the site. I considered venture capital firms, but I think the investment ammount would be too low for them.

What is a good website / place to go to learn about funding?
Should I ask for more to protect against any un-expected requirements instead of asking for more later?

Thank you for your help.

 

[user-7256]

If you're going to start a company, and you're currently fitting the def. of "freelancer", www.freelanceswitch.com has some awesome articles on "moving up the ladder" and expanding into a business...

Take a look around http://www.bnet.com/ too.

 

[USMC_1833]

Yea, I am not really looking to start a freelance biz. I don't use my graphics / development skills except really on my sites. What im starting is more of a service, where as people use the site to accomplish a specific goal, and then they are done. I've been to freelanceswitch.com, but will make sure to check out bnet.com

Thanks for the good advice.

 

[mhdoc]

For that amount of money the hassle, distraction, time consumed will not be worth it. That's the kind of situation where family/friends run up a charge card for you. You want something unregulated, informal and close to home.

I would strongly recommend reading through PaulGraham.com essays. He has a ton of really valuable insights to offer.

 

[shockie]

at only $5000 you wouldn't want to sell out to a vc or be accountable to anyone else for that matter. i'd suggest keeping it entirely your business where you get to make the decisions, and just save up a little bit, try to spend a little less and make a little more on the side.

it'll be much worth it in the end, but if you absolutely need money now then i'd suggest asking the bank.

 

[IAmAllanShore]

On the ladder of start-up money, VC's wouldn't bother themselves on a project with less than a 7 figure pre-money valuation. Angel Investors typically are looking for the 500k to 3mm pre-money valuations. You're even below most SBA/SBIC/SBDTC loans - the advice that this is where you use a credit card seems to be right on target, as scary as it may be to put up your own money.
Best other option? Start an LLC or other legal entity and find a friendly credit union that will let you run a line of credit only through its name/id, without you guaranteeing the loan personally (Not common).

-Allan :gl:

 

[USMC_1833]

The problem with asking friends and family is that its an adult related site. If I try to use my own money, my wife - who manages the bank account - will most likely slaughter me. I mean granted, I have the money to completely fund the project myself, it's just convincing my wife that would lead to headaches and me sleeping on the couch.

Thanks for your advise so far though.

 

[IAmAllanShore]

Then you may have answered your own question right there... if you don't think your wife wants you doing it, well, in my "accounting" method a divorce is a lot more expensive than $5,000 (So is couple's therapy, so is a trip to the ER for the broken nose, so is the stress that it would rack up...) and if you are getting money from a 3rd party, there is no way you are keeping that secret.

Sorry, but short of starting a second life in the Mid-West with a woman named "Cindy" you're out of options.

-Allan

 

[psalzmann]

If you're going to start a company, and you're currently fitting the def. of "freelancer", www.freelanceswitch.com has some awesome articles on "moving up the ladder" and expanding into a business...

Take a look around http://www.bnet.com/ too.

Those are two fantastic sites!

Thanks Mr. Holt!

 

[Keral_Patel]

Getting 5K from venture capitalist is risky.

I would have earned it on my own and then invested it. It would be only the loss of time and efforts if there are any losses.

And I am not trying to be negative but you have to think on that side too. Only then the foolproof plan is in place.

If there is all profits that you are seeing now. And if it is gonna work that way then it is all well and good. But you have to think about its issues and what if this and what if that. Weigh all the pros and cons.

Make a checklist of it.

Some cons can be ticked marked if you have found another way around it.

And in end you will get a good solution.

If you don't know how to do that then let me know the idea in PM and I can make a list of all the pros and cons for you.

Thanks.

 

[stscac]

at only $5000 you wouldn't want to sell out to a vc or be accountable to anyone else for that matter. i'd suggest keeping it entirely your business where you get to make the decisions, and just save up a little bit, try to spend a little less and make a little more on the side.

it'll be much worth it in the end, but if you absolutely need money now then i'd suggest asking the bank.

Ask the bank. Expect to have good credit to get a loan.

Getting 5K from venture capitalist is risky.

I would have earned it on my own and then invested it. It would be only the loss of time and efforts if there are any losses.

And I am not trying to be negative but you have to think on that side too. Only then the foolproof plan is in place.

If there is all profits that you are seeing now. And if it is gonna work that way then it is all well and good. But you have to think about its issues and what if this and what if that. Weigh all the pros and cons.

Make a checklist of it.

Some cons can be ticked marked if you have found another way around it.

And in end you will get a good solution.

If you don't know how to do that then let me know the idea in PM and I can make a list of all the pros and cons for you.

Thanks.

VC's generally won't look at anything less than $2,000,000. If you're looking for other investors other than a bank, try angel investors. Angels generally start at $50,000 and go up to $600,000. Any investment less than that, you fund personally, via savings, FFF, or loans.

-Steve

 

[R9V.com]

Quote for Peter Griffin from FAMILY GUY:

"You could have sex with 1000 fat chicks at $50 a piece..or you could have sex with 50 REALLY fat chicks at $1000 apiece"

 

[USMC_1833]

thanks for everyones suggestions and support. I have found a developer that wants to go in on the project and has agreed to code the backend. I will keep everyones ideas and feedback for future projects.

Thank you.