It is a website-based business model. I realize I need to generate lots and lots of data to form the background of the website the analytics one can do with the subscription. So I have gotten started by engaging with service providers. I should be done with what I think is the first phase of data collection and organization in about a month from now. Haven’t set up a company yet, but going by what I see on legalzoom, should not be a hard thing to do. At what stage do I start engaging with VCs? Actually, how do I go about approaching VCs? I have a full time job right now and have to support my family.
Questions
At what point to reach out and start talking to VCs?
11 answers from the community
A· Feb 12, 2015
Sounds like you're still very early stage. Why not reach out to some people on AngelList?
A· Feb 12, 2015
Ok. Question I have: How do I keep the concept a secret while reach out to a number of people on Angel List (yes, I understand confidentiality agreement / NDA, etc.) but is there a risk that they will not work?
A· Feb 13, 2015
Let's say the VC signs an NDA, and then he goes and has coffee with a programmer friend of his a week later . They decide it's a cool concept. The programmer works on the idea and launches it 2 months later.
And tells you he's not interested.
How is this different than you launching your idea, and then 100 programmers throughout the world like the concept and clone it ?
You can't be paranoid and promote something. They say execution is
where the competition begins.Not napkin concepts. Tell everyone.Get comfortable with telling everyone. NDA's are worthless.
A· Feb 12, 2015
My real issue is this...
For the concept to be in full bloom, I am going to need some real heavy lifting to be done (in regards to the data collection). I estimate I will need $25-50K for this. I can front about 20K of this sum from my savings. So cash is not a big deal.
My need though is going to be more around technical advice, driving traffic to the website, etc. And also guiding me and helping think thru when would be a good time to quit my job and get into the venture permanently, based on assessment of market traction, volumes, etc.
A· Feb 12, 2015
This is not what VCs do. VCs give you money to scale your company. They are not here to help you decide when to quit your job and focus on this. This is something you should get advice from an incubator or something.
VCs wrote $2M+ checks. With your stage, it's a waster of your and their time to approach them. Find someone who has startup experience and try to get help from them. Don't even think about raising money at the moment. It's not happening.
A· Feb 12, 2015
This is not what VCs do. VCs give you money to scale your company. They are not here to help you decide when to quit your job and focus on this. This is something you should get advice from an incubator or something.
VCs wrote $2M+ checks. With your stage, it's a waster of your and their time to approach them. Find someone who has startup experience and try to get help from them. Don't even think about raising money at the moment. It's not happening.
A· Feb 13, 2015
+1000
A· Feb 13, 2015
It doesn't sound like you're ready for VC -as has already been said VC funding is to accelerate scale and for that funding to be deserving you need traction, a team and a road map.
You've still got some things to work out about your business, and that's what seed funding is for.
You don't mention it but sounds like you're doing this solo? Get out in to your local startup community and start connecting with people and building a network of peers -you'll soon gain an understanding of who early stage stuff works. Meetup is a good place to start if you don't have an easily identifiable tech hub/cluster where you are.
Check out Y Combinator's How To Start A Startup series on YT.
A· Feb 13, 2015
I'm in a very similar position as you... I found some online business training videos that I would highly recommend you check out. They are produced by Dr. Jeff Cornwall, professor of entrepreneurship at Belmont Univ. in Nashville. The first video is free...it's called Entrepreneurship - From Idea to Launch. This gives you a good overview of the process of starting your business the right way.
The 2nd video is called, Building A Business Model - The Entrepreneurial Mind. The price is $197, but after viewing the free video, Udemy will send you an online coupon for 75% off your next one...so you can get it for about $49.
I'm about half way through the 2nd video...and it was well worth the 50 bucks I spent!
Here's the link: https://www.udemy.com/u/jeffcornwall/
The courses are at the bottom of the page.
Dr. Cornwall also does an awesome series of entrepreneurial videos on his facebook page, that you may want to check out. He interviews some interesting CEO's and startups here in Nashville. The site is here: https://www.facebook.com/pages/The-Entrepreneurial-Mind-Dr-Jeff-Cornwall/129827683723995
Good luck brother...
A· Feb 13, 2015
Do not put your family at risk, and don't quit your job! It seems like you don't even have enough money to do what you believe is required with your project, yet, you want to eliminate your one stable thing, your income? Here's what will happen, because you're inexperienced, and are on an anonymous forum wondering if LegalZoom is a good choice, and "when should I approach VC's for money": You'll blow through all your savings faster than you can ever imagine, and this "side project" will consume a lot more of those resources than you anticipated. Eventually, the music will stop. You'll run out of money, and then you'll be looking at your family going..."Shoot. What was I thinking, I could have built this thing slowly, WITH my income". You gotta hustle this thing man, because the above commenter is right: likely no angel, seed fund, or VC would hand you a check. The moment you quit your job (which also likely makes you ineligible for unemployment benefits), and if your business is not generating any revenue........you got 99 problems; and LegalZoom ain't one. Please don't take this comment as shade, we write all this stuff because we genuinely want to help you (and your family) succeed and not get in over your head, and burn up all your savings in the process.
A· Feb 17, 2015
You need to do a lot of reading up.
A VC won't touch a tiny investment like $50K. They need at least $500K chunks.
Secondly, VCs are going to want 20x or more return - is this something possible with what you're going to invest in?
Third, if you want to keep a secret, don't raise money. It is impossible.
If your business is protected by nothing more than secrecy, then you're doomed anyway though. Execution is what separates success from failure.