Venture Capital Start-Ups

[razor2025]

* That site looks really shady.....

On my last semester, a professor who did few start-up and had some VC/Angel buddies offered a class about start-ups. I have to say that was one of the most valuable education I got out of college...

From what I remember, $50k is pretty pocket change for investors. VC won't be interested at all, since they don't want to manage anything too small (they have their own investor who wants big deals, not small change). Your best bet is to fund through your own (self, friends, family). You should network with local entrepreneurs and find out who's doing angel. At your stage, a good angel will float you $50k without asking much on equity. They will make sure to get first dibs on your initial funding though (1st stage funding), where they will want the lion's share.

Important thing with angel or VC, isn't just capital though. It's about building connections and utilize the network resources provided by your investors. Keep that in mind when you're looking for investors. Oh, and good luck! I'm also starting a start-up (at a snail pace though, since most of us are busy and I have an internship).

 

[JS80]

Originally posted by: Amtrak
Thank you JS80... good point too. I hope this works okay.
I don't want to get in a bank loan, I am just hoping my investor wont take more then 35%.
50% would just be disgusting to me...
Nice avatar by the way!

Look up preferred shares. Most angel and VC funding is done through preferred. And you will control the company because you will own 100% common, but they will have liquidation preference with the preferred.

Be prepared to bend over on term sheets these days though.

 

[Amtrak]

JS, What raises the most red flags about that website? thanks

 

[JS80]

Originally posted by: Amtrak
JS, What raises the most red flags about that website? thanks

1) The website is amateur
2) The "VC" is based in Ohio
3) The website is very suspect and ghetto
4) Legit VCs don't bother with $50k investments
5) This is not a VC firm, they claim to have a network of investors (BULLSHIIIIT!)

I bet this company is more like they will charge you $1k and they will claim to find angel investors for you.

 

[JS80]

http://www.419legal.org/invest...37-go-big-network.html

Not exactly a "scam" per se, but definitely not a VC. Sounds like loan sharks to sure thing businesses who can't get financing through banks.

 

[JS80]

http://ripoffreport.com/reports/0/358/RipOff0358319.htm

Beware: There is possibly a scheme with these people. They say that are the lender and claim they've financed up to $25mm for small businesses; however, they will take your money, pretend to listen to your presentation, and then send you a form letter stating that they'll finance up to 25% of your requested amount...and you'll need to pay more money to get your presentation 'mentored' by a romance novelist who pretends to know how investors operate without any investment or financial background. The parent company is owned by a used car subprime lender. When asked to provide proof they could actually finance the 25% promised, they can't show anything and won't sign a thing. The bank actually laughed at my letter. I asked around (after the fact) and found that other people got swindled over $475 bucks a pop and never heard from anyone again. This is a scheme and they have no disclaimers, disclosures, or adherence to 'truth-in-advertising' statutes.

another http://smallbusinessonlinecomm...m/thread/8706?tstart=0

 

[AccruedExpenditure]

Agree with what has been said about self financing and avoiding the site that you linked to. What type of business are you looking to fund?

 

[Gibson486]

I used to work for a venture capitalists and angel investors. It varies from how many people are investing it in it into to how much they are willing to put down on it.



edit:

dude....50K? venture capitalists and angel investors drop down well over that. They will laugh at you because if you do not have the resources to get $50K, they will think you will not have the resources to succeed.