Post: #26

(05-21-2014 06:23 AM)travolta Wrote:  

(05-20-2014 02:49 PM)TheFinalEpic Wrote:  I would say the goal is 10m and earn 5% on that money for life. That gives you 500k a year to do whatever you want, and for me personally, that'd be far more than enough.

Nobody with 10M in assets is focused on earning 5%. "10M" and "5%" and two very disconnected things to be thinking about.

Fair enough, I see where you're coming from. To get to 10 million in assets there is really nothing stopping you from going far above and beyond that in a real estate portfolio/stocks and bonds etc. 5% is the interest you could hypothetically receive on cash if you found the right brokerage, that's more what I was going for. In that situation, without doing anything, and if you were to pass away, it could continually support your family for generations.

Post: #27

Doing nothing sucks. Working more or less is fun. There´s better and worst moments.

Post: #28

(05-21-2014 10:33 AM)Pepini Wrote:  Doing nothing sucks. Working more or less is fun. There´s better and worst moments. But it´s sure hell better than staring at a wall all day.

You find tons of things to pre-occupy your time, and I'm not saying you should stop working towards goals and creating more wealth. That is the basis of this whole manosphere movement, to become a better man. I'm just saying that if you had the choice (and you can give yourself that choice with lots of blood, sweat, and tears) would you be working for the man? Or living your life to the fullest every day, where nothing was impossible.

Post: #29

@Gringuito! Thanks for dropping so much excellent knowledge on this and the other thread. :-)

I worked for a few startups in the Bay Area briefly before moving on to start my own online business. But now I have what I think is a great idea for a large, underserved niche market with only one real competitor. The competitor's product is mediocre by all accounts (and this is coming from the folks who USE this product!)

What do you reckon would be my best bet for funding my idea outside of self-funding (which I don't think would cover even the first iteration?)

Without giving it away, the idea is for a web app. So I'm guessing at the very least I'd need a solid developer, a designer and a database guy?

Thanks again for giving your valuable time and insights to this community. I think I safely speak for everyone when I say we really appreciate it.

Post: #30

(05-21-2014 12:34 PM)VincentVinturi Wrote:  @Gringuito! Thanks for dropping so much excellent knowledge on this and the other thread. :-)

I worked for a few startups in the Bay Area briefly before moving on to start my own online business. But now I have what I think is a great idea for a large, underserved niche market with only one real competitor. The competitor's product is mediocre by all accounts (and this is coming from the folks who USE this product!)

What do you reckon would be my best bet for funding my idea outside of self-funding (which I don't think would cover even the first iteration?)

Without giving it away, the idea is for a web app. So I'm guessing at the very least I'd need a solid developer, a designer and a database guy?

Thanks again for giving your valuable time and insights to this community. I think I safely speak for everyone when I say we really appreciate it.

I'll need a bit more info. Do you have more than just the idea currently? Do you have a proof of concept or barebones website to demonstrate? What kind of background do you have, are you on the tech side or management side? Have you run a startup before?

Post: #31

(05-21-2014 08:40 AM)Steve9 Wrote:  Gringuito, do you also invest in publicly traded technology companies on the Nasdaq? If yes, how much research would you do before buying shares in a small fast growing company?

I have a simple family office that handles most of the investments. I did carve out a small % of fun money to invest but I really haven't had time to do that in a while. Normally when I invest in a public company I know some of the principles personally.

Post: #32

(05-22-2014 07:05 AM)Gringuito Wrote:  

(05-21-2014 12:34 PM)VincentVinturi Wrote:  @Gringuito! Thanks for dropping so much excellent knowledge on this and the other thread. :-)

I worked for a few startups in the Bay Area briefly before moving on to start my own online business. But now I have what I think is a great idea for a large, underserved niche market with only one real competitor. The competitor's product is mediocre by all accounts (and this is coming from the folks who USE this product!)

What do you reckon would be my best bet for funding my idea outside of self-funding (which I don't think would cover even the first iteration?)

Without giving it away, the idea is for a web app. So I'm guessing at the very least I'd need a solid developer, a designer and a database guy?

Thanks again for giving your valuable time and insights to this community. I think I safely speak for everyone when I say we really appreciate it.

I'll need a bit more info. Do you have more than just the idea currently? Do you have a proof of concept or barebones website to demonstrate? What kind of background do you have, are you on the tech side or management side? Have you run a startup before?

Sounds like he's just the idea guy.
"But an idea, unfortunately, is worth nothing. Less, even, than the paper it’s written on (idea guys love restaurant napkins)."
http://riskology.co/idea-guy/

I've been to quite a few startupweekends and hackathons myself and there is always 20x more business people (guys with ideas) than people who can actually code.

I do webdesign and even I have problems finding people (devs) who want to work on a startup with me. Their time is just to valuable to waste it on a project that might turn out to net them no money.

If you really want to go through with it you best bet is
a) learn how to code (I did that)
b) Pay a developer to do it for you.

Post: #33

(05-22-2014 07:05 AM)Gringuito Wrote:  I'll need a bit more info. Do you have more than just the idea currently? Do you have a proof of concept or barebones website to demonstrate? What kind of background do you have, are you on the tech side or management side? Have you run a startup before?

1. The closest thing I have to proof of concept is validation from people who use the competitor's software and told me they'd be more than willing to switch over to a better platform (if only one existed!)

2. I don't have a barebones website but I could put something rudimentary together myself if need be.

3. My background is on the management and marketing side of things. I have a good bit of general tech understanding from spending so much time around designers, programmers and database folks. I also know what I don't know.

4. I've never run a quote 'startup' before. Just my own internet business which consists of consulting, marketing and information product creation.

(05-22-2014 08:17 AM)Tresdus Wrote:  If you really want to go through with it you best bet is
a) learn how to code (I did that)
b) Pay a developer to do it for you.

I've considered the first option. I reckon I'd be able to get a decent grip on PHP or similar within about a year. But my concern is that it would be a giant misinvestment of time and energy because there's no way I'd do as spectacular a job as somebody who really knows what they're doing. And I have zero interest in building a shit product.

So that's where option B comes in and what my original question is about. How to find the funds to pay people who know what they're doing to do this thing RIGHT.

Post: #34

You can still hire someone once you actually have the site up and running. All you need is a MVP (Read the "Lean Startup").

No one will fund you to pay for developers unless you can actually get money from friends/family. It's pretty hard to get money even when you got your website build.

Post: #35

Gringuito - a few back at you:

If you've been planning properly the multiple can be lower though. I think the 5-6 times would be closer to a non-prepared first time selling your company multiple.
- Yes, this is my key point. Although we can read about how to improve this situation in books, I would think most people for their first (and maybe only) "event" actually end up in this place. And then you scratch your head how the hell such a big deal could result in feeling like you have a disproportionately low percentage leftover.

Accountants and lawyers will eat some of the deal. The larger the deal the smaller the %. At the 20M since it can be a good chunk but as you get bigger it gets to be a smaller %.
- Absolutely. But, I think I picked a good proxy for transaction/soft costs on a $20mm deal. Hey, the bigger the better. Hopefully someone's first deal is much bigger. But, if you are lucky enough to have a deal of this size as a first timer...then, you are lucky enough.

The IRS % is the one where pre-planning really becomes important.
- Yep, but too bad all too often on a first deal you need to learn the hard way. Also, I think your industry is inherently better setup for this type of pre-planning as often people in tech go ahead and choose a C-corp in anticipation of future capital raises and/or exits. Not the case in many other (or most) industries.

You also need to be domiciled in a state that has good tax treatment.
- Amen. But, I learned this one the hard way too. It took 3 years of paying the socialist republic of California to figure that this is not trivial. Again, reading in a book or looking at numbers is one thing...but it often takes the pain of cutting checks to make you get off your ass and make the necessary "planning adjustments."

I personally avoid business partners and I only like diluting my ownership stake with my employees.
- This is where I'm going to try and soak up your wisdom. I'm at a crossroads here. My key point is that for a first time, smallish deal ($20mm or less) most people won't have the same access to capital that a veteran entrepreneur (or even 2nd timer) will. And to get to a $20mm event, most people will need some help (the kind of help that isn't free!).
- Amen on future deals not taking the dilution.

And lastly, I will emphasize the Jack Ass Tax. Hey, on paper we all say that this won't happen...but almost everyone learns this one the hard way. I'm committed to myself that I will minimize the Jack Ass Tax on the next one...but, we never know until we are truly there, right? Besides, none of these events just coast in seamlessly. They all seem to have those "11th hour" moments...where, you end up pacing around for 3 weeks straight wondering about all the last minute shit that is going to blow it up. (I swear I had to switch to the huge bottles of gin to get me through). And then when the wire actually hits you get that jolt that makes you stand up like Touch Down Jesus and shout to the heavens "IT'S GOOD! IT'S GOOD!" (...followed by some immediate jack ass tax...)

Post: #36

^hahaha. I can truly imagine the jack-ass tax scene.

I had some minor occasions in my youth like big poker wins that I basically blew. I bought all my buddies sushi dinner +picked up the tab on all drinks (at 16). I can just imagine what its like for a 30yr old zero-hero type.

Post: #37

(05-21-2014 12:34 PM)VincentVinturi Wrote:  What do you reckon would be my best bet for funding my idea outside of self-funding (which I don't think would cover even the first iteration?)

Without giving it away, the idea is for a web app. So I'm guessing at the very least I'd need a solid developer, a designer and a database guy?

Thanks again for giving your valuable time and insights to this community. I think I safely speak for everyone when I say we really appreciate it.

Ways to fund your project:

1. Self - you retain 100% ownership
2. Family and Friends - you can still retain 100% ownership
3. Angel Investor - Typically you have to give away 15% of your company. You can get funding from 50K to 250/500K. Not a lot of management interference from the Angel.
4. Incubators - Roughly same as Angel Investors, plus you gain solid management advice.

Issue with getting outside investors is your are competing with so many great ideas out there. While there are a lot of Angel investors, there are way more good projects.

If you position your project outside of the US, you may get better traction from Investors (also outside of the US). South East Asia has a number of rapidly growing incubators/Angel communities.

Post: #38

(05-20-2014 05:43 AM)Architekt Wrote:  How many of you are on your way to becoming rich or are already there?
When I say rich I mean 100m+ in liquid assets. ie; never thinking about what something costs ever again.

Any aspiring oligarchs lurking in the shadows here?

Most millionaires consider themselves "rich" once they have approximately $7.5 in investable assets.

Gaining entry into the 1% requires a net worth of $1.2M (million). The bottom half of the 1%, i.e. 0.1 - 0.5% typically consists of doctors, lawyers, middle management, and small business owners. A net worth of $5.5M gives you entry to the 0.1% - 0.01% group. To reach the super-elite status of the 0.01% requires a minimum net worth of $25M.