"before they have revenue or even a proven path to revenue." Don't mean to bash you Chris, but I really hate that - it's the whine of the industry and it won't go away The problem with the web is you get starry eyed developers building technology that doesn't have a market willing to fund it. Investors of any kind aren't stupid and it's not a charity.
At university, I created a publishing house (and which is why I got into the internet, but that's another story). One of our first projects, was a magazine, in which I went door knocking to local businesses, whereby we raised advertising of a few thousand dollars with nothing but a rate card and me talking with passion. That first edition, we raised enough to print 4,000 editions in glorious colour. Success perhaps? Not quite - we had a shocking distribution strategy, and I could not bear to face returning to those advertisers asking for more because I knew fair well their investment was a flop. But at least I gave them *hope* of making a return: I had an identified market (students) matched with their need (exposure to that market). All I need to do was prove I could do it - that's the right way. However asking to "trust me, there is no market yet but we'll find one" is just wrong. There is no way in hell they would give us money, and of the 95% of businesses that turned us down, most of them did so because they didn't appreciate the market. But at least we could identify that market for them to make that decision. Asking investors to take in more risk is not appropriate. They know full well how much risk they can take. Entrepreneurs just need to recognise they have an obligation to make a return and you need objective evidence to prove you can. If I was to invest my cash into a business, I will look at signs that I can recoup and build my investment either through knowing the person well enough that I have faith in them or evidence that there is a return to be made within a period (like revenue). So in the absense of proof you will make a return, I think the only justifiable reason why a investor should invest in you is because s/he actually knows you as a person and can make a judgement on your ability; not blind faith. On Wed, Oct 1, 2008 at 7:16 PM, Chris Saad <[EMAIL PROTECTED]> wrote: > Richard I would imagine that a typical web startup these days would > take $100-250K at a seed round, before they have revenue or even a proven > path to revenue. In some cases that amount may even be enough to work out if > it's going to succeed or fail. > At that level (and in Australia generally) investors are going to have to > take on more risk if they want to make real bets on the web. > > Chris Saad > > Cell: 646 797 2890 Twitter: @chrissaad > > FaradayMedia.com . Media 2.0 Workgroup . APML.org . DataPortability.org > > > > On Wed, Oct 1, 2008 at 12:16 AM, Richard Hayes < > [EMAIL PROTECTED]> wrote: > >> >> Dear group, >> >> There is a new funding opportunity based in Sydney. >> >> There is a new group who are currently actively looking for new >> investments. >> >> A formal 'beauty parade' aka pitch will happen mid-November but I can >> not tell you 'officially' who they are. >> >> The group has about some serious private money and any investment will >> be in the $100-250K range. >> >> Anyone who thinks they have an 'investor ready' project should contact >> me off-line. >> >> But as we all know that there is a huge difference asking for money >> and receiving funding. >> >> 1. You must have a business plan. >> 2. IP helps >> 3. Revenue and hopefully even profits (or at least a reasonable path >> to profitability) >> 4. A decent board and management (or at least advisors) >> 5. Exit strategy within 3-5 yrs (saying Google will buy us does not >> count!!) >> >> If anyone wants to talk I will be at Opencoffee tomorrow or just call >> me over the next week. >> >> BTW, I will be hosting a Opencoffee / Silicon Beach Sailing day next >> weekend. Sailing, Sea Food and Beer. Possibly not in that order. >> >> >> >> Richard >> 0414 618 425 >> >> >> >> > > > > -- Elias Bizannes http://liako.biz --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
