Last night I caught a quick blog title in my google reader from Nate Westheimer that said nothing but “what would you do with 750,000”…it got me interested so I jumped over to his blog to try and find the meat…but I couldn’t find it, and so I emailed him.
He promptly replied with a link and some additional information (turns out the post was about this challenge which I had already seen via the NextNY group [btw, Nate is an active/awesome member of that group too]).
Anyway, my initial thought to the post was that it was related to something along the lines of “what would you do with $750,000”…or more specifically “assuming you could get a small amount of funding for your start up idea, what would you actually do with the funding?”.
Being that I’ve never gone out to get funding, I honestly don’t know what my own answer would be (which is also part of the reason I’ve never gone out to get funding I guess).
Now I know the simple answer is to say you would invest it in growing the business…but what I’m looking for is more an answer along the lines of a quick bullet list, breaking down the distribution…something like:
1. I would use around 50% to hire people…and since we are talking about brand new ideas that haven’t been developed, those people would be developers and designers…this money should cover salaries and related expenses for 24 months…
2. I would use around 25% for hardware/hosting requirements…that should cover us for at least 24 months.
3. I would use 5% for office related expenses (paper, pens, desks, etc.) this should cover us for 24 months…
4. I would store 20% in the bank for emergencies and future, yet unknown, expenses.
Now those are all totally fake numbers/ideas that I was just throwing out there as an example of what kind of answers I’m interested in hearing (not that anyone is actually going to respond with answers, but hey you never know).
Anyway, I find it an interesting thing to think about…like I said I’ve never bothered to explore funding, so I really have no clue. But I would think a big part of asking for the money would be to provide a detailed breakdown of just how you plan to use that money right?
Even though I have been able to build up a few small companies and projects without the funding, I do see a lot of other non-money advantages that getting some Angels or VCs involved could bring (look no further than the recent summize acquisition)…and I would love to give some of my projects those same advantages…
I just don’t think too many Angles or VCs are going to let me walk in and say “Hey I don’t want or need any money right now, but would you take 5% of my company for free?”…well actually they may be happy to have me do that, but I don’t know that they would really give me all the extra benefits just because of it (if you have a free stake in something, do you really have any emotional stake in it? I don’t think so).
Since I’m on the topic of funding…perhaps my friends John and Niko will get funding down the road for their newly launched site celebrifi.com (a sort of “digg” for celebrity news)…not really my cup of tea, but I like these guys a lot and I think they’ve got what it takes to eventually hit the mark (and I love the fact that they keep moving forward and trying - see ourmesh.com)
Of course I could be biased since I’ve known John for awhile now and consider him a good friend…I sort of have an emotionally vested interest in seeing his projects succeed (honestly I like seeing any project succeed, but hey that’s just me).
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Kevin has a day job as CTO of Veritonic and is spending nights & weekends hacking on Share Game Tape. You can also check out some of his open source code on GitHub or connect with him on Twitter @falicon or via email at kevin at falicon.com.
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