Hello everybody, I am 17. The first time, i ever heard of this word "Funding" was on TechCrunch blog. I didn't know what it meant and didn't want to too. It starting hitting me more frequently and so i learnt what it was after visiting Y! Combinator's website. So far, i know that Large companies give an amount of money to start ups for developing them. What i don't get is that what do the investors get in return ? Y! Combinator says that they would get a part of the startup company in return. What does that mean ? Can anyone explain me this concept ? Thanks,
O.k. large corporations see potential in a smaller start up company. They set up a budge for them to receive "funding" each month, day or year this smaller company will receive payments from this larger company to help them grow, What the larger corporation get is maybe a piece of the company(if it goes public and has stock),or they get 50% of sales for the next 10 years. The list could go on and on what the bigger company could get out of providing them with money. Its normally stated in a legal document signed by both parties, but funding is basically money from another company to help you grow. hope that cleared it up
Thanks, i am cleared of what funding means. Let me take an example. Weebly.com is a Y! Combinator. Can you tell me what they would get in return ? Bcoz, Weebly is a free website. Y! Combinator would get money only if Weebly is sold ? Also, i live in India and if i need funding, can i contact foreign companies for it ? Bcoz, i cannot travel abroad to meet them in person. If not, what can i do ? Thanks,
well websites make money, even if they are free websites. Via advertisements, link building and such. So they could say they get a certain percentage of ad revenue or if it is sold like you said, but selling it isn't the only way for revenue. If it was a lot of people wouldn't be in this forum right now. You can always fax them if legal documents need to be signed or call them to talk to them. Even send an email or a letter by mail.
Sometimes the return may be tangible such as percentage of ad revenue but sometimes it can be intangible. Sometimes a small company may hold the patent to some revoluntary technology and in exchange with the money the big company offer, they will receive the rights to use those technology in the big company's business. Some may insist on certain percentage of shares in your smaller business and they can bring in their management team and can dictate their terms on your business, ie have a seat on your board of directors. There has to be some kind of potential benefits which may be tangible or intangible. Well, it all depends on the dollar value of the funding. If you are looking at a few thousand dollars then probably Fedex the legal documents where you and them would agree and the deal is done. If it is several hundreds of thousands or millions of dollars then taking the trip to meet the funders in person would not be a bad idea, these could actually be the other way round where the funder would visit your business premises to get a feel of what you do because ultimately your company would partially be theirs.
Thanks for the reply guys. I'm actually not looking for a lot of funding. Just a few thousand dollars. Can you recommend any place to look for investors ?
Friends, family, yourself, loan, credit card, prosper.com (USA only), VC, and AIs are the big ones. However, since you are 17, you'll have a very difficult time getting funding, because 18 is considered to be an "adult" and is when you are legally responsible. Here is some more information: http://en.wikipedia.org/wiki/Venture_capital http://en.wikipedia.org/wiki/Angel_investors http://en.wikipedia.org/wiki/Seed_capital PS: If you like, I can do 1 hour free consulting on your idea. Send me a PM if you are interested.
that mean hes will take a look at your idea possible expand it and gave you possible earnings and ratings on your ideas its really not needed pass that one free hour
I'll take a look at your idea and do some ramblings on thoughts, possible competitors that I know of, etc.