Venture capital, anyone got some advice?

[seebol_star]

mate.. you can get loads of independant techi's online to bid for work you post if you want it done quicker...
I suppose if you really want to go for it save up as much as possible and then after your contract ..focus on it full time.. and maybe try and get a good vc involved... james caan has a decent company with good rep?!..
gudluck!!!!

[chef]

from what you've said and assuming im watching someone on something like dragon's den (i.e people looking for a VC to invest):

-you have a great idea but it needs 3 people/1 yr to complete
-you have funds yourself but you dont want to risk them
-you dont want to give away a significant portion of your co. in return for capital
-you believe it could significantly earn results (i.e make money) when complete


if i was a VC i'd question why you dont want to take the risk yourself and naturally assume its high risk, therefore an increased stake, which you dont want to give

as an alternative:
do you have 3 years funds?
if the answer is yes, at the end of this contract, begin work on plan b and spend 3 yrs coding, if it comes off your laughing as you have given away nothing of your co. , if it doesnt then go back to plan a..

alternatively you have to face the fact that any VC given the info you just have mentioned that they will want a large % in return for the risk of returns..

blunt i know, but thats an outsiders perspective

[BoredBloke]

I managed to secure £100k of venture capital investment in my folks company just by writing a good business plan. The investors eventually sold their 35% stake to my folks for £2 when it was obvious a number of years later that they were rubbish at all of this business malarky. So effectively I managed to get them a gift of £99,998 and I got exactly Jack Sh1t of them for it - even though I had to take a few days off work and fly to Ireland over the Christmas break. i.e. not cheap!

[ratewhore]

You could qualify for funding dependent on area and local employment. Have a look at www.businesslink.gov.uk for funding information. Other than that, I hear business angels are not a bad source of investment compared to VC's.

Also, you may want to consider dropping your day job to 4 days a week to work on plan B dependent on your risk/reward perspective...

[MPwannadecentincome]

the other thing you might want to try to find out more is to post a generic question on linkedin.com "answers" - if you are on linkedin that is!

[Moscow Mule]

Read this on your commute...

http://www.amazon.co.uk/Bringing-Not.../dp/029785545X

[MPwannadecentincome]

a venture capitalist will want equity - just like on Dragon's Den. The larger the percentage then the higher the reward for them. If you want someone else's funding you need to balance out how much equity you give away as well as how much control you give away.

That's not to say it is not worth doing - just do it with your eyes open - get as much advice as possible - increase your network to people who have been in a similar situation as you and try and persuade one of them to act as a mentor to you - it should not be a problem if you are not competing with them and you do not have to give away your idea either.

Good Luck!

[where did my id go?]

there is the vca - http://www.bvca.co.uk/

[minestrone]

The contract is up at the end of January so i'll se which way it is hanging then. I'm hoping to get at least a beta of the community pages up and running by December so if it's going well then i'm not going back to day job and might look to the much cheapness option.

It would be interesting to meet up with VC peeps during January to see if they actually believe it is worth something, if so I can then choose what to do.

But the question is where do these VC folk hang out? I take it they are not in the yellow pages.

[d000hg]

You can split work up so people don't have access to the whole project, components and so on, keep key parts totally locked away from anyone else... a bit like the Feds in Snow Crash, but (hopefully) not so inefficient

[minestrone]

Try this:

http://waxy.org/random/arsdigita/

That's the type of story that makes me worried, liked this quote though..

"what it was like to watch venture capitalists and professional managers run ArsDigita (I replied "like watching a group of nursery school children who've stolen a Boeing 747 and are now flipping all the switches trying to get it to take off"). "

I know of someone who formed 2 pretty successful companies and who was eventually chucked out of both by the investors, I don't know if it was VC though.

#d000hg: something like that is a good idea but I would be very wary of letting the score control out until I had developed a place in the market. Not saying yer going to knick it but I would not put it past an offshore team.

[d000hg]

If you could design/spec/document what is needed, maybe you could afford cheap coders from Asia to do the grunt work. If you are able to review the work they do it could be a good compromise.

Or you could hire me to work remotely for £400/day... and I can subcontract to a team of 3 Indian guys for about £60/day each and make sure they keep in line.

[NotAllThere]

Try this:

http://waxy.org/random/arsdigita/

[minestrone]

Over the last 2 years I have been working on an application/website in my spare time, it started out as a hobby but in the last 6 months it has grown and I and some others believe there is real potential for a bit of wonga to be made. It's not live.

It basically is social networking site, very niche in functionality but with a very broad appeal, the site will be a portal to purchase items with I could gain commision from. Long term I believe that the site could be attacting up to 50 million hits a month with 100,000 registered users and I am basing that on real evidence. The long term idea is to sell it to a company that sells the items I will be fronting.

The problem is that I do not have enough time to develop this, my commute to work is nearly 4 hours and i'm usually shattered when I get home, I never feel like i'm getting a good run at coding, it's 1-2 hours here or there. I dont want to give up work because there is feck all out there if this backfires. I thikn there is about 500 hours left in development, I have put that in already and about 70% of it is open source which I had to rewrite portions of.

So i'm thinking about venture capital, Ideally I would like to be in a position to hire 3 developers for a year, get an office, a massive server and gain business experience from the VCs. What I don't want is to give up much of my idea ( really the eventual sell on value ) and basically invite in a bunch of suits to give me hassle all day. I would also worry that they would turn the idea down and then use it themselves. I have quite a bit of dosh in the bank but I don't want to risk it. I know I can't have my cake and eat it.

I have never been involved in anything more than negotiating my daily rate so I know I could get screwed over on what I believe is my last chance at the big time.

Anyone got some stories, ideas or advice on the subject. Cheers.