Any advice to get a small investment (5-15k) for an indie hacker?
Basically my plan would be to present my product/plan to the investor over about an hour or two and I would maintain a lot of control over my product but give them periodic status updates.
I'd love to go the full indie route, but I'm running out of cash and considering selling my car (which I don't use that much so I should be fine).
I think it doesn't really make sense to try to get funding from a stranger for this amount? I tried the friends route but without contracts and experience things kind of fell apart.
No debt.
Don't sell your car unless you can live without it (major city only). If you can, great! Cars are an option in just about every city on Earth, not a requirement.
Get a job (everyone except trust funders and kids with wealthy families had a job while also starting their business). At minimum, start picking up contract work. Yesterday .
No debt. Bears repeating. The heroic founder who jacked things up on multiple credit cards is a cute story that winds up in Wired once in a while. Who you don't read about are the literally thousands of people who either give up and cash out everything to pay off the debt then go back to normal jobs OR wind up in permanent debt cycles, homeless, and either addicted to drugs or dead. My wife is a mental health professional and recently worked at the top psych hospital in the US before leaving to start her own practice. This is very real. I'm not kidding.
Don't take out a loan. That's debt. Work. Every city on Earth has jobs for software engineers right now. It's one of the most under-staffed careers on the planet. I've got near-zero Dev work on my profiles and I still get companies asking to talk about Dev roles.
From my experience, investor's money brings way more pressure than you can imagine. Sometimes you are not ready for it. Debt brings pressure as well. I would avoid such scenario.
I wouldn't sell my car either unless I am 100% sure about the success. 99% is not enough.
I would rather take some freelance jobs or try to pre-sell my product. Why don't you pitch us you product here? Perhaps you will find some good customers willing to pay 6~12 months upfront.
If you still want to get some money from investors, maybe you should try an equity crowdfunding platform. If you manage to get in there, that means your product is partially validated because they usually have a high criteria to accept applications.
Have you considered pre-selling your product?
This is a part of the strategy. Right now I have partners but I'm offering them it for free to establish credibility.
Have you considered asking a decent one time fee for lifetime access to improve your financial state?
Yeah it wouldn't make sense for an investor to just toss you 10k. Go get a bank loan if your convinced or better yet get a day job and switch to working it on the side.
Sounds mini investments is a good startup idea for us indie folks!
In regards to getting a loan from the bank, how involved are they in inquiring about the nature of the business? What determines the kind of loan they give me? I can't imagine them being good at determining the worth of my company since it's a niche idea.
Not a good idea for investor folks though.
Get a personal loan. You'll have to personally guarantee a business one at this level anyhow.
Also, it could be a good idea for investor folks. It isn't right now, which is the problem that needs fixing. If my product works out, a well-diversified 'micro investor' could make some decent money. Us indie hackers don't need a lot of money to be effective.
Yeah I'm thinking this my best bet. Less wasted time in communication, and I think I could pay it off quite quickly if I secure a normal job. I just hope the interest is negligible if I'm able to pay it off in 3 months. That's all the time I need.
For people to invest with that kind of amount, they need to see or know that the product is worth it, but I doubt you don't know that. I suggest you make a business plan, this website https://thecontractorscoach.com helped me a lot, I hope it helps you too.
If you were provided with $15k, how long would you expect before you can pay it back?
Does your car qualify as collateral?
Crowdfunding is a fantastic idea for this amount.
Would you be interested in a cash advance where you repay me back every quarter based on a small percent of your future revenues in your company or based on a small percent of your income from contracted jobs you pick up? No equity, no fixed loan payments, no debt. No personal guarantees. Pay based on how much money you actually make in the future.
So something like Lambda school but for investors? I really like this idea, and I wondered what kind of legal framework they set up for doing this kind of thing.
I could send you my qualifications, why I'm the right person for the job, what I've completed, and more details. The main thing is how can I trust you apart from your profile on IndieHackers? Maybe a simple webpage would help.
My main worry is that I don't know you and I don't want to waste too much time on this. It does make sense though in that I do feel confident I could pay you back based on future income.
Yes, you are right- a website would be most appropriate. I am mostly just testing the idea in all honesty.
You would send qualifications and ideally the site would connect to your revenues on stripe if you had any or any other income information that you had. It would be very difficult to lend to you with no revenues or income at all. I really don't think ANYONE would do that.
most startups using convertible note or safe for small size checks like that. Search online for resources on "convertible notes"
Have you considered crowdfunding?
What do you need the money for? Is it a task a co-founder could take over? In which field are you lacking resources (besides money)?
I would not sell my car to fund an idea. Remember, your idea remains speculative and might not work. How much would you have to fork out to replace your car at a later stage? At least with your car you know what problems you have, a cheap new car might fail you at the most inconvenient time. And if you can't get a small funding for a business idea, how would you even get funding for a new car?
I would definitely go the route of setting up a proper business plan that analyses the idea and then present it to possible investors. Read up about business plans and what it should entail. At the very least, try and figure out what your "break-even point" will be. This will form part of what is referred to as a "feasibility study". Remember, a business plan is just an idea. We all have many ideas, most of them are crap. Before we risk our capital on random ideas, we need to asses if the business plan might actually be feasible.
Venture capital might be easier to get than you imagine, if you put in the extra mile. There are even some business/government initiatives that support such ventures, so perhaps look into this a bit. You might even try a something like a kickstarter fund or one of those online venture capital platform thingies.
Good luck my friend!
Business plans are nice but the real thing takes a good chunk of time. I suggest doing a "lean canvas" instead. Might take you an hour. Free. Go here: https://leanstack.com/leancanvas
Thanks for the good advice! I think the approach I'm doing will work out for me, even if it fails completely. I would regret it if I didn't give it my all right now.
My friend try to bootstrap your venture as much as you can till you get the paying customers on board. Once you do that, you will be in a much better position to pitch your startup to the investors
Bootstrap in what sense?
Bootstrapping means self-funding through pre-existing cash flow and being critical of outgoing expenses.
The best thing to do might be to get customers before an investment or loan. Validate your idea, and then take the big step.
This is in the works, and I'm already working with some companies/products. Still need extra cash though.
That's great progress - is contracting / consulting an option? If so, it might be easiest route to getting a cash injection fast.
Nah, that's a lot of work and distraction when I'm in a productive part of the project, it's not worth it for me. I'd rather sell my car and stay in this headspace, or somehow find an open-minded investor.
The issue with investors is that you have to give a sizeable chunk of your business most of the times. I would vote for selling the car in this case, but it really depends on circumstances.
Haha, I love how you're suggesting selling my car, even though that's "conventionally" bad advice. Normally people just assume you're following a clueless dream. I might be, but I like your confidence in me!
Also, I really don't want to give someone a large chunk of my business. It might be my ego, but I just can't stand the thought of someone who didn't believe in me or contribute that much getting a lot in return. It's so much work on my part convincing them in the first place.
Well, the reason I am suggesting selling your car is because you said you didn't need it. And taking debt is a far worse idea since if it doesn't work out, you would have to pay it back over a longer period of time. So depending on circumstances, selling your car may be bad advice, but since it is an object you don't need and you are confident your idea might work then it seems like a good option.
But this begs the question. If you are not confident enough it will work, to sell your car and invest in your own idea, why would an investor be confident enough to invest in it?
I am confident enough it will work (although nothing is for certain), I was just admiring your ability to see nuance and context in my situation.
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