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If I have 10k cash I want to riskily invest, can I invest in early round startups, or do those stupid rules still apply (about minimum net work/earning). I make a decent amount, and I have a fair bit of cash/assets, but they're under the minimum for those SEC rules (200k/yr/2 years or 1mil+ in non-residential assets).
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Aug 23, 2015 06:50
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Sparta posted:If I have 10k cash I want to riskily invest, can I invest in early round startups, or do those stupid rules still apply (about minimum net work/earning). I make a decent amount, and I have a fair bit of cash/assets, but they're under the minimum for those SEC rules (200k/yr/2 years or 1mil+ in non-residential assets). I know and have some start ups, PM me if you want to invest.
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Aug 24, 2015 04:35
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anne frank fanfic posted:I know and have some start ups, PM me if you want to invest. I think I lost premium a while ago with some ban; email me manfrin@gmail.com
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Aug 24, 2015 05:27
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Sparta posted:If I have 10k cash I want to riskily invest, can I invest in early round startups, or do those stupid rules still apply (about minimum net work/earning). I make a decent amount, and I have a fair bit of cash/assets, but they're under the minimum for those SEC rules (200k/yr/2 years or 1mil+ in non-residential assets). If you only have 10k to invest, do you have something less tangible to go along with it? Great contacts? A history of successful exits? Expertise building and growing great products? 10k is not a lot of money (maybe 1 or 2 months runway).
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Aug 24, 2015 06:21
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musclecoder posted:If you only have 10k to invest, do you have something less tangible to go along with it? Great contacts? A history of successful exits? Expertise building and growing great products? 10k is not a lot of money (maybe 1 or 2 months runway). I'm an engineer and Tim Draper is my cousin's [father in law?], so I have technical expertise and a connection I could call. I've also worked at a bunch of startups and I feel I have a good eye for good ideas. I know 10k is not much, but I want to find ideas in infancy form.
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Aug 24, 2015 21:33
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Sparta posted:I'm an engineer and Tim Draper is my cousin's [father in law?], so I have technical expertise and a connection I could call. 10k isn't nearly enough to get in as an investor except maybe in a pre-seed round as a friend. Even then the paperwork required to accept your $10k and the implications for future funding rounds makes it unlikely anyone getting good advice will take your money. Either find more money or start your own startup and use the $10k as runway.
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Aug 25, 2015 03:58
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Longshot but anybody know anyone who funds big projects? My stepfather has been working on a project with a few other people for 5 years now on a major new network protocol that would basically revolutionize the internet if it were implemented imo based on what little they have written about it that I have read. But their money ran out a year or so ago and nobody they have talked to is interested for some reason. Two of them have been network engineers for 40 years each and the third has a lot of business experience. If anyone is serious and knows a guy who knows a guy etc I can give a little more information and then a lot more if youre actually serious. Thanks
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Aug 27, 2015 15:24
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Have they attempted to sell or license this technology yet? Five years is a long time to work on something without a single customer (outside of academia). Generally any VC willing to invest in something like that is going to be a B or C series and not a seed or even A series. If nobody seemed interested why would a VC be? I would say hang it up and work on something else.
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Aug 27, 2015 17:04
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musclecoder posted:Have they attempted to sell or license this technology yet? Five years is a long time to work on something without a single customer (outside of academia). Generally any VC willing to invest in something like that is going to be a B or C series and not a seed or even A series. They did hang it up. I am just surprised because I thought this was the way in which the web made big leaps forward. Must be something I'm missing. Here's something about it : http://us1.campaign-archive1.com/?u=f105fd56904428bca9da44a82&id=3612bf8367&e=7bc6e275f1
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Aug 27, 2015 17:54
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Tautologicus posted:They did hang it up. I am just surprised because I thought this was the way in which the web made big leaps forward. Must be something I'm missing. e: The only place this would work is the DoD Vulture Culture fucked around with this message at 18:06 on Aug 27, 2015 |
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Aug 27, 2015 18:00
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I agree that the DoD/intelligence agencies ought to be interested, and that's the last thing I told my stepfather. His business guy is on some other planet when it comes to that, not sure if the government was really on their radar. Not sure why. Anyway just wanted to see what people thought here. Its not so obvious to me why this is a non-starter. Edit gently caress i erased the other part of the message, which was just asking you to explain why you thought it definitely wouldn't ever work. the worst thing is fucked around with this message at 18:19 on Aug 27, 2015 |
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Aug 27, 2015 18:07
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Tautologicus posted:Edit gently caress i erased the other part of the message, which was just asking you to explain why you thought it definitely wouldn't ever work. You need to find a local use case that you can sell someone on which does not depend on literal worldwide buy-in. "It makes the Internet better" is good news for egalitarians and literally no one else. Vulture Culture fucked around with this message at 18:24 on Aug 27, 2015 |
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Aug 27, 2015 18:21
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Vulture Culture posted:You're asking equipment operators supporting a worldwide infrastructure carrying 7 billion people to all replace their equipment, at tremendous cost, to speak this totally new, completely incompatible thing that literally no one uses because reasons. Then someone needs to pay your stepfather's research group for it. K i am aware of all this, so basically there's no good reason besides inertia, which is what I thought all along. This protocol is cleaner faster smaller and more secure than TCP/IP. Not sure why you're exaggerating things to make a point either, that's not necessary. "Literal world buyin"? Only good news for egalitarians and literally no one else? Come on.
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Aug 27, 2015 18:36
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Tautologicus posted:K i am aware of all this, so basically there's no good reason besides inertia, which is what I thought all along. This protocol is cleaner faster smaller and more secure than TCP/IP. Not sure why you're exaggerating things to make a point either, that's not necessary. "Literal world buyin"? Only good news for egalitarians and literally no one else? Come on.
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Aug 27, 2015 18:43
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Vulture Culture posted:Your optimism is really cool, but seriously, look at your financials. People aren't buying this. You can dress it up and play the denial game on your strategy however you want, but you need to look at how the technology adoption cycle actually works and what problem this is actually solving for people. It's not "inertia." It's "figuring out how to replace the entire Internet is your job, not your customers'." Did you just take a class about startups or something or what cause im getting this cultish jingoistic vibe..anyway i said this isnt my thing and i have no financial interest in it. Looking out for my mother mostly. I cannot get a single useful thing from your posts about this. My optimism is really cool. Jesus christ
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Aug 27, 2015 18:58
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Tautologicus posted:I cannot get a single useful thing from your posts about this. My optimism is really cool. There's a difference between optimism and naivete... And you got a really useful piece of advice: Vulture Culture posted:You need to find a local use case that you can sell someone on Find one customer who will really benefit from this new technology and get them to pay for a prototype or a pilot program. Then once you have that customer and a solid case study showing the benefits of the technology other customers will follow.
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Aug 27, 2015 19:47
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No, you're not listening. While "There's no good reason besides inertia" isn't wrong, it's basically the same as saying "Okay, so there's no good reason we don't have faster than light travel besides physics." This idea has no chance at replacing the existing global Internet infrastructure because BUSINESS LITERALLY DOES NOT WORK LIKE THAT. It would be one thing if this was strictly iterative and interoperable with existing technologies. That would be hard to bring to market, maybe impossibly so, but there's some precedent for those things getting adopted over a time horizon of like, 20 to 30 years. But "Burn it all down, start over" is not a proposition that works for the Internet. You are asking every single equipment maker on the planet to discontinue every single one of the their products, cutting off all revenue from ongoing consulting and maintenance contracts, spend shitload of money adopting this new technology and building new products, and then attempt to sell those untested new products to their customers without losing them to competitors. And for what? It's cleaner than TCP/IP? Who gives a poo poo, how does this make Cisco money? It's faster? Who gives a poo poo, how does this make Juniper Networks money? Smaller? So you're proposing something that will actually result in them moving less hardware? More secure? That's great for consumers, but how does this make money? What you have to understand is that technology is inherently worthless. It's worse than worthless, actually. Technology is expensive. It's only when you use technology to solve an actual, pressing, difficult problem for someone (i.e. something that makes someone somewhere money) that it begins to have any value at all. In 2015, "TCP/IP works but it could work better if it was something else" is just not a pressing enough problem to justify they cost of the technology you're proposing. That being said, there IS potentially a way to make this work — you have to find a very specific, pressing problem for a large enough customer that can be better answered by this technology than the alternatives. DoD is a good example. Focus on using this to secure their networks, or run drones, or something. Turn the technology into a product that does JUST THAT, and then market it to them aggressively. Sell the product, not the technology. If it sells, if it works, start looking for other specific problems it can solve, develop products to solve them, and then sell those too. Start small and work your way up. It will still be drat difficult to sell a paradigm shift rather than an improvement, but that's at least a market you can address.
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Aug 27, 2015 20:04
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It sounds like "startup" just means "tech company" for the purposes of this thread. I'm working on starting an educational services/out of school care company and I'm not sure if it fits in with this thread, since there's no tech we can sell and no big exit that we want other than a good wage for implementing our pedagogical approach... I am wondering how you go about gathering data for a business plan, though. I have no idea how big our market is (there are 135 000 children in the age group we want to work with in my city, does that count???), what the current trends might be, current products and services that exist, all that. How do you guys usually fill in that info so you can get loans and poo poo?
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Sep 3, 2015 18:35
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tuyop posted:It sounds like "startup" just means "tech company" for the purposes of this thread. tuyop posted:I'm working on starting an educational services/out of school care company and I'm not sure if it fits in with this thread, since there's no tech we can sell and no big exit that we want other than a good wage for implementing our pedagogical approach...  Hit the bricks. Find people whose problem you want to solve and talk to them. (As a rule, if the market research you need for your product is readily available, you're quite probably entering a really saturated market.) Your goal is to find a market before you start to develop a product. As you find out their needs, you can find out what other products and services they've looked at but don't quite fulfill their need. Start there. Quantitative research on other companies' market share and bookings doesn't help you until you understand what information you'll actually need to make good decisions. (Until you identify the correct direction for your product, you don't even know who your competitors are, right?) Steve Blank's The Four Steps to the Epiphany is the canonical startup book on customer development, but it's a messy read and Blank cleaned up a lot of the ideas in The Startup Owner's Manual. Talking to Humans is another quick, approachable read on the topic. Bottom line: do not try to develop a product without a market, or you'll end up like that Internet 3.0 guy above. Develop ideas, talk to people, and find at least one person who says "I would pay you money for this." That interaction is your starting point. You're just spitballing until you hear those words. As you learn what people need, you'll need some way of organizing those ideas, estimating work required, and prioritizing them so you know which to actually start getting done. Jeff Patton's User Story Mapping is tailored towards agile software development, but the approach to organizing work can be easily adapted to any kind of product development. Vulture Culture fucked around with this message at 21:00 on Sep 3, 2015 |
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Sep 3, 2015 20:45
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Sorry for the OT post - is there a similar thread for Small Business in particular? My partners and I (3 of us total) launched an recreation / entertainment based business about 6 months ago and its been overwhelmingly successful for us so far. We are in an oil & gas based city in a severe economic slump yet our profits have been steadily increasing. Its a relatively new industry so its possible that it fades away in a few years (think laser tag or fun runs). We've streamlined well and we have a solid roster of employees & each partner puts in somewhere between 10-20 hours of operations work for the business per week. Our margin is somewhere around 300-400% (including paying ourselves a salary of approx 45-50k / year each) and our bank account has been growing steadily and is currently sitting slightly north of 220k with no outstanding debt - by the end of the year it should be between 400-500k. What are the options for excess cash for a small business? My limited research has come up with a few different options: 1) Pay it out: will lead to a hefty tax bill - either as salary or issuing it out as a dividend 2) Grow / Re-invest: due to the nature of our business this would require expanding (either within our current city or to a nearby city). Certainly the option we're looking most into but we could likely pull it off for 100k or less - very much on the table & likely to happen but we'll still have excess cash on hand. 3) Invest it in a safe product like a business GIC: rates look to be >1% which is abysmal but better than nothing. 4) Use it to buy out other businesses or grow in a different direction? The economic slump means that we may have some good opportunities to branch out & pick up other types of businesses at an attractive price. Not trying to make this sound like a brag post, we never expected things to go quite this well, but we're all pretty careful with our spending & don't have excessive spending lifestyles so we're not in any rush to pay ourselves out.
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Sep 16, 2015 01:10
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Pieces posted:Our margin is somewhere around 300-400% (including paying ourselves a salary of approx 45-50k / year each) and our bank account has been growing steadily and is currently sitting slightly north of 220k with no outstanding debt - by the end of the year it should be between 400-500k. Probably a combination. Just like as an individual, you need some amount relatively liquid just for the ups and downs or surprise expenses. How much would probably vary by your business. Agree on some sort of cushion amount that you'd just keep in the bank. Let's say just randomly that it's 150k+ 50k per additional location. That leaves you with more money. If I had a business spitting out cash like this I would certainly expand, but not too fast. Another location that you can also with your partners directly manage would be completely reasonable. Another 100k there. This year I'd also say to do a cash dividend. Increasing salary means both the company and you will pay more taxes, where cash dividends are taxed @ 15%. I wouldn't even just take the rest as dividend, but perhaps half of whatever remains, with the rest towards a third location once the second one is open.
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Sep 17, 2015 17:59
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Smart expansion, yeah. Don't go into it with the thought that you need to invest all that money immediately or it's gone, really take some time to do it right. Figure out exactly what a new expansion will need to be as successful as your existing business(No idea what you do, but probably minimum good location with reasonable rent, competent trustworthy management, a mixture of experienced and new workforce and marketing budget). Look for those things. Don't move until you have them all. Then throw as much of your weight behind it as you're able. What you're doing with a first expansion is not just capitalizing on new markets, but learning how to expand. Running two locations is very different than running one, which is extremely different than running three, which is light years away from running locations in multiple cities, which is different then regions, which is different than states. You want to make your mistakes on a small scale with the first expansion and get your playbook in line before you try to really grow. A lot of people don't do this and then they waste a shitload of money and end up with a bunch of underperforming branches that they can barely run. Don't be those guys — set yourself up for success, make your mistakes on a small scale, and build for the future. Buying companies might be a good idea too, but the thing you have to realize is that if something is for sale it's because there's something wrong with it. You have to do a lot of due diligence to find out what that is, and make sure it's something that plays into your strengths. You should be buying to grow rather than maintain, otherwise it's probably not as good a use of your funds as focusing on your own expansion.
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Sep 17, 2015 21:09
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Baby Babbeh posted:Smart expansion, yeah. Don't go into it with the thought that you need to invest all that money immediately or it's gone, really take some time to do it right. Figure out exactly what a new expansion will need to be as successful as your existing business(No idea what you do, but probably minimum good location with reasonable rent, competent trustworthy management, a mixture of experienced and new workforce and marketing budget). Look for those things. Don't move until you have them all. Then throw as much of your weight behind it as you're able. We run an interactive game experience called an escape room (https://en.wikipedia.org/wiki/Real-life_room_escape). Found a great second location with very reasonable rent. We just signed the lease today and expect our total costs to get the place up & running will be approx 75k or so. Our first location is streamlined well enough that employees are able to run it with a little bit of help from one of the partners for high level details. There is no inventory involved with our activity (except for maintenance / repair items) so we don't keep inventory like retail or a restaurant. Considered the idea of a dual expansion, but thought it was too ambitious & likely difficult to pull off (and stressful). We have a big list of lessons learned from location #1 that will be put to good use for the new place. I'm excited to get moving on an expansion, while we're very happy about the success of the first business we lost a bit of motivator to work on future projects so this should help us regain some momentum. I've spoken to some other larger companies that have franchised or expanded too quickly and have had to shut down some of their smaller or less profitable expansions as well - we are well aware that what we do may well end up being a fad activity!
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Sep 22, 2015 03:22
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Pieces posted:We run an interactive game experience called an escape room (https://en.wikipedia.org/wiki/Real-life_room_escape). Found a great second location with very reasonable rent. We just signed the lease today and expect our total costs to get the place up & running will be approx 75k or so. Our first location is streamlined well enough that employees are able to run it with a little bit of help from one of the partners for high level details. There is no inventory involved with our activity (except for maintenance / repair items) so we don't keep inventory like retail or a restaurant.
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Sep 22, 2015 03:39
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moana posted:I can see running out of clients eventually since it's not a thing you can go to twice (for the same room, anyway). Can't you just redecorate the room every couple of months?
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Sep 22, 2015 04:57
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moana posted:Oh my gosh, I just went to one of these in San Jose (Kuma) as an anniversary present and it was so fun! We've been talking nonstop for the past two weeks about the cool puzzles we could make if we opened our own in Santa Cruz. I don't know if it's a fad that will come and go but I feel like the hardest part would be repeat customers - the one we went to only had two different rooms and I can see running out of clients eventually since it's not a thing you can go to twice (for the same room, anyway).
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Sep 22, 2015 14:04
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EB Nulshit posted:Can't you just redecorate the room every couple of months?
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Sep 22, 2015 16:31
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I have an idea for a website/service which I want to make happen. I'm a designer, ux designer and front end developer. I have a friend who is a back end developer who is keen to work on this with me. I've done quite a lot of user research and I'm pretty certain there is a want for this service to exist. Monetising it (aside from revenue from ads on the site) would come later. The initial idea does not have a monetary aspect, although it is clear to me where the possibility to monetise the idea lies. My main interest in getting this up and running is to invigorate an industry that i care about a lot, but ideally I would also like to make this a viable business in the future. I'm wondering if there is any kind of business framework I should be looking at for setting this up. I want to avoid future problems in working out what is mine and what belongs to the back end developer. I'm not in a position to pay my back end developer a set daily fee and maintain full ownership. We are planning to get together for a weekend soon to sort of hackathon ourselves an MVP, from which I hope we'll be able to gauge interest further, and perhaps even start thinking about applying for some funding. I'm happy to talk more about the idea specifically, if that helps. I'm just looking for any kind of guidance on how to go about the business side of this.
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Sep 23, 2015 15:54
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jaymeekae posted:I have an idea for a website/service which I want to make happen. I'm a designer, ux designer and front end developer. I have a friend who is a back end developer who is keen to work on this with me. I'm not sure exactly what you are asking - are you just asking about the mechanics of setting up an LLC and splitting the equity between the two of you?
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Sep 25, 2015 15:33
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What's the go-to Ecommerce solution for providing an actual, physical service with your website as a point of sale? (In Canada)
tuyop fucked around with this message at 14:17 on Sep 28, 2015 |
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Sep 28, 2015 14:03
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I just incorporated in the State Of Florida in June, got my office, have my CFO, CTO, Myself and an investor. We're in the black from the clients we do have, which from what I have found is quite unusual for a year 1. Our business provides 10,000.00$ a year of pro-bono work to a local non-profit, and our contracts are with Architecture firms and various programming contracts. Our staff consists of me (Bachelors of Science in Computer Science USF) Our iOS Dev (BSCS UF), our CFO (MBA from FAU), and an investor of 5000.00 big ones. We provide IT services catered to small business <25 people, and local non and not for profits. You'd be surprised how often IT firms want nothing to do with these people because they don't have a lot of capital. If you have any questions for me regarding Incorporating in Florida you can e-mail me at wiseley@chainring dot net.
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Oct 1, 2015 21:27
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tuyop posted:What's the go-to Ecommerce solution for providing an actual, physical service with your website as a point of sale? (In Canada) You might want to check out Launch27. Otherwise you can put something together yourself using Stripe/Recurely/etc. and some boilerplate HTML. Woocommerce would work surprisingly well if you wanted a CMS, lots of extensions to support subscription services, etc.
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Oct 10, 2015 00:01
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Imagine this... There's a company out there that has raised a half million to create a first version of their product. They *almost* did that, but ran out of money before they could finish. They've had hundreds of beta users with some good feedback. Everything about the business idea, the code developed already, the other founder and the initial investor seems legit. Now, they need someone to help finish. So they call up good old Gounads and asks me to work for equity-only. They claim the business is currently worth $4m and are currently having an independent agency do a valuation. (I'll try to talk them down) (To further complicate it all, this product isn't the only part of the business but the equity would be for the entire business) I'd like to get in and do this deal, but then I go read about how the IRS taxes these things. For established companies, they count that equity given for work as income. WHAT? Doing some quick math.. if they give me, say, 10%... that's $400k worth of value that I'll have to pay income tax on (assuming I file my 83b up front) and I don't have ~$100k to spend on taxes. If I don't file that 83b, I still have to pay that tax over the vesting period, and it might be more assuming the company value goes up. Besides a straight-up equity deal, are there other ways to structure this where I don't get screwed by Uncle Sam?
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Jan 19, 2016 14:44
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There must be some way to arrange that, given that SV/SF is full of young engineers who don't have the cash to pay for taxes on their stakes in unicorn startups. Also, I'm obliged to recommend that you not work with these fellows. Assuming a consumer app startup not involving hardware or infrastructure and doesn't apparently have pre-existing employees, a half-million should be enough to develop a prototype and get it out the door. What did the money go to? Should you still wish to work with these fellows, you may consider that without your help, the value of their work/investment is zero. They own a sinking ship and you're selling life rafts. That's worth only 10%?
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Jan 19, 2016 17:34
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I could be wrong.. but usually one of three things happens on things like this. 1. The company is essentially worth $0 when founders get on board, so there are no taxes. 2. The company is established and pays a cash salary with a small amount of compensation coming from equity. 3. Options instead of straight up equity (I found out more about this route since writing, there are upsides and downsides) Having a decent valuation but no money/revenue is rare. Makes me think more and more that the valuation is BS. Where the money went is something I'll be finding out about. I know they do have a chunk left over, but there would be launch expenses that it'll need to go to. I know they went with a contracting firm to develop the first version and it took ~ a year to do. It's very plausible to go through that money, especially without strong tech leadership to steer you to the cheaper options. The more I think, my guess is... we're going to disagree on values and never come to terms.
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Jan 20, 2016 15:35
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Gounads posted:Imagine this... That doesn't sound right - and I also think you may be looking at real equity e.g. Trade able stock. Not sure how the federal government would get involved with appraising a private business. It also sounds like double taxing if true. Should be a quick discussion with an accountant though which you'd hopefully do anyway.
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Jan 20, 2016 16:54
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Vomik posted:That doesn't sound right - and I also think you may be looking at real equity e.g. Trade able stock. Not sure how the federal government would get involved with appraising a private business. It also sounds like double taxing if true.
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Jan 20, 2016 18:47
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I am not a tax lawyer, but the way it was explained to me is options aren't taxed until they're actually exercised. So you might have an option to buy 10% of the company for a pittance, but until you plonk down the cash it's not an asset and thus it isn't taxable. Once you do, you have to pay normal capital gains taxes. Again, I am not a tax lawyer and you should really talk to one before you do this. For what its worth, I'd be very nervous about working for just equity in a startup that doesn't even have a product yet, especially one with, presumably, a high burn rate and a history of not properly assessing its expenses. When you do work for equity, you really have to be thinking as an investor rather than an employee. You've got to ask yourself the same sort of questions an investor would ask: who is this team, what is the market for this product, what does their funding picture look like, etc.
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Jan 20, 2016 19:44
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Been a long time since posting here but just wanted to give an update. We're almost done with the webapp for http://www.nanaya.co (it uses math to predict your love life) and we'll be officially launching on Valentine's Day. We have a decent number of sign ups and will have a lot of incentives to share results which should give us a good start, give or take other marketing efforts. Given that algorithmic prediction, romance, etc are hot topics, would be nice to get more media contacts as cold calls rarely merit attention. Don't know if anyone here writes or knows anyone else that would write about it. We're in testing now, so things more or less work if they or anyone else here wants to try. Feedback's welcome. Beyond that, working 100hrs/week for half a year is bad for your body. It's been 120hrs/week the past two. Don't do it.
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Jan 28, 2016 00:55
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Gounads posted:I could be wrong.. but usually one of three things happens on things like this. The valuation is likely based on the last investment round, and may or may not be close to anything realistic. There are many games played there. Look at what the company does, ask about their business plan, growth and revenue projections, etc. and come to your own conclusions. 4m is a small valuation for a company that took on 500k in funding...that sounds fishy. You also shouldn't look at this as 10% of 4m even if 4m is a reasonable valuation, because the stock isn't liquid (you might not even be allowed to sell it on a secondary market) and there are liquidation preferences that investors almost certainly have and you don't, so you get screwed more if things go south.
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Jan 30, 2016 04:44
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