Have you raised money for your project?
Have you raised money for your project? How much did you raise? What were the terms? Any recommendations for people who are looking to raise?
I'll start.
In 2015, I had been researching how insider transactions (form 4s) affect stock market prices, and I'd been doing it for 2 years. I contacted a friend from college and he tutored a businessperson whose daughter needed help with the SATs. My friend set up a meeting with the businessperson to setup a 0 interest loan of $15,000 payable in a year and a half. That worked great; although the project ultimately failed (we improved the research and attracted $1.5Million in pilot commitments, but our strategy did not perform and investors withdrew their capital).
Having to pay back the loan was annoying but ultimately possible and I'm grateful for the runway it created.
I was just thinking that if I had an additional $50,000 or so, that could make a huge difference for Code For Cash business. I would be able to fund ad campaigns and grow without risking that the cash position would go negative!
So, fellow entrepreneurs and masters of the universe. Where to get the money. How much, if any, to put on credit cards. When is the right time to ask friends and family?
Funding is complicated.
At small scale, often the 3Fs is the best - Friends, Family, Fools - generally people close to you or in your network, as:
a) They are easier to convince
b) They have the lowest expectations which translates to the least complicated terms as well
c) It's quick
In general raising money from more sophisticated investors - VCs or PEs can be a real rabbit hole. I have seen people waste years of time without much luck. One needs to be very cognisant of
a) The amount of time, effort and head space it can take through pitching, chasing VCs, constantly tuning a deck
b) The complicated terms VCs want, and the level of control they ultimately gain on a company
Also, I think you should do some googling about 'VC returns' and 'VC investor math'. The thing most people don't understand about VCs is that they're looking for companies with huge return prospects, like 100x, so will generally be eyeing sexy niches like AI. They are also prone to never saying no, but also never saying yes so you can end up in a cat and mouse game for a long time.
Using credit or loans is ok where necessary, but obviously be extremely prudent. You don't want to completely mess up your life.
In general I'm a big fan of bootstrapping, or using minimal self or 3F funding and stretching it as far as possible. There are now many examples of hugely successful companies that have taken this approach.