You want someone to make you a loan that gets repaid with some interest rate, but only IF the business makes it? I find it hard to believe there is anyone who would take that deal. Even the SBA makes you put up money and collateral to prove the faith in your own idea. I used to be a partner in a VC group and we used the following: #1 What is the persons track record? A person who has had prior success and management skills is the most important factor. Even the best idea is likely to fail without good management/execution. #2 The "idea" - product or business. This is still secondary to the above. You don't need a home run idea if you have the right person running the show. #3 Willingness to put their own money at risk. Playing only with someone elses money is asking for trouble. If you aren't going to put up something, then you shouldn't be asking others to do so. It wasn't a set percentage or dollar amount and could be relative to what the person had. $5k is such a small amount I can't imagine why someone wouldn't get a second job for an idea they genuinely believe in (assuming they just don't want to get a loan)? Someone putting up all the funding should be getting half or controlling interest in the business for assumming all the financial risk. With what you are asking, you're apt to get someone who will say they are interested to find out "your idea" and then decide whether they will take it and use it without you - and without loaning you any money.
I would agree with mjewel with this. If it is something you believe in and it is a small amount, you should try to earn that money for your idea. Incidentally, what is the $5k used for ? How long would that last ? If you are the one doing the coding and design work then I guess you could restrain from paying yourself to get this idea up. If it is for hosting, you could always start small with a virtual hosting account. If it is promotion, you can always put it on a small scale beta and use all the free promotional resources available like submitting to search engines yourself and so on. Let the site grow at a manageable pace. Once you have a solid working site, I am sure it is easier to get someone to invest and probably at a higher price tag. If you do not have the money to get the project started then it is not going to be easy to get people to invest in pipe dreams. If you do not believe in your project to stake your property and livelihood in it then it is probably not good enough for someone to invest it. VC or any investors wants to be sure they have a very high probably of getting their money back and more. If the owner of the project doesn't believe in the success of the project, it would be difficult for investors to believe in it. Remember, they are not investing in the project as much as they are investing in your talent and ability.
that would be suicide just that quote alone would stop me backing it, as you don't have confidence in your own product your best bet is to get a good business plan list everything, and stick to it regardless after a month or so take it to a bank Regards John (Carl05's brother)
Odds are your idea isnt good enough. Before you pursue funding evaluate your idea more carefully to see if it hasn't already been done or if it is truly novel. VCs dont just hand out money to anyone with an idea. It has to be a vaible idea atleast.
A "micro loan" from the SBA would fit this situation. Like everyone said, an actual VC wouldn't give something like this a second glance. I'd probably do the credit card route myself. Hell, I know people with 40-50k on their credit cards for start-up funding!
VC firms wouldn't even let you through the door. Digg.com almost didn't even get their VC capital and all they wanted was $2-3 million. They had to beg for that. VC usually invests >$10million and are looking for business which would generate over $50million a year. Best idea, if your idea is good enough is to have people you know, or their friends invest...