I have a 2 year old website, so far tried and true. The ad earnings are still nominal right now, but the member base is constantly growing. The site currently has 5000+ opt-in & confirmed members and that number grows by an average of 25 new users per day. The site so far has cost $10,000USD for programming, design, layout, hosting, and all the mods and tweaks made over the past 2 years. My goal is to take it to the next level with many modifications (some minor, some major), that I estimate to run between $8,000 - $10,000. The mods I require will slingshot the site into the social media-sphere and give devs an open API to integrate and work with. I can guarantee that membership will grow exponentially after that. The site was featured on TechTV and Cnet and I realized nearly 1,000 new members in just a few days after that short exposure. I'm interested in learning if anybody has dealt with investors on projects in the past and how the relationship started and perpetuated. Clearly, there has to be an incentive for an investor, namely ROI, but I'm looking for a resource to advertise my site, information and ideas to find suitable investors. Thoughts? Thanks.
I already have some ads there - re: "The ad earnings are still nominal right now" Without being intrusive with ads (pop ups or full screen ads), I have Adsense on the page. Leaderboards, paid 125x125s, etc. There is ad revenue, just not enough to give me the up-front $10k. $8-10k will cover the next round of mods I want done. Ideally, I'd be able to get a little more and hire somebody on a part time / regular basis to push the hell out of the site.
Hoyles, it's kind of a sticky situation. Most people who have that kind of money to throw at a comparatively high risk venture don't have the time or skills to evaluate the business and to appreciate your vision. I'm in a postition to make that kind of investment but it wouldn't be cost effective. You'd have to prepare your figures, feasibility, business plan etc and I'd have to spend considerable time analysing it and deciding whether it had a future and whether I could invest in YOU (because ultimately my trusting you and your skills, ability and staying power is crucial to the decision). Do you see the problem? That's why on smaller ventures I like to advise people to eschew equity funds and use loan capital instead i.e. don't try to find someone to share the risk - keep all the risk yourself and take a loan out to finance the next stage.
@Merkersarl, thanks for the comments. So far, the initial $10k investment has been my own, and my own risk, naturally. However, now I'm running short of $10k's to put into this project, so investors would be my initial alternative. I've recently bought a new house and a new vehicle, so I don't want to take on any loan capital right now and my equity funds are also hands off at the moment. However, I don't want personal expenses to come in the way of progress on this project, as it has the potential to be quite big - even if I do nothing and let it grow the way it has been, it'll get there. I'm partnering site initiatives, SEO/marketing campaigns, link exchange, etc - with a friend of mine who has considerable online success, breaking 6-figures each month with his website ventures. However, the obvious question begging to be asked is "why not ask him for the investment?" - and the reason is that he is already partnered with others on said ventures, so not all of that money is his. My secondary reason is that I prefer to keep business, business and not involve friends or co-workers. Finally, I am estimating the capital required in stages. The "next step" is already on paper and that's what I'm weighing in @ $8k-$10k. To become a major player, which I classify as 100,000+ users, at least - it may very well require 2-3 more stages of upgrades, namely hosting: bandwidth (loading speed) and storage. As they are fine for now @ 5,000 users, however 20x that, where I want to be @ 100,000 users - may (likely) require upgrades. I've been approached by other, similar (and in two occasions, fairly larger) sites for non-monetary partnerships, but I've tentatively declined for the time being, or have at least put them on hold, as while this secures the longevity and future of the project, it doesn't help my current situation. These partnerships, if anything, would bring more traffic and more users my way, making the aforementioned "next step" more difficult to achieve. Naturally, I want to limit downtime and any disruptions my users will experience. If I get a flood of traffic, I don't want to be forced to add server upgrades to my already-extensive list of mods and add-ons.
Let me get this right. - You don't want to take a loan - You don't want to involve friends - You don't want to involve "co-workers" (at your place of employment presumably) - You don't want to involve family I've bad news for you. For the smaller projects, those sources probably account for more than 99% of investments. And if you wanted to get an investor involved he'd look to see some commitment to the project from you - like giving up your job! Typical investor thinking would be along the lines of either you're confident in the new business becoming huge or you're not. I don't make early stage investments, seedbed finance etc., for a 3% profit. The high risks associated require high returns. If you don't have enough confidence that your own business plans will lead to huge success why would investors have that confidence?
@Merkersarl, I've already invested over $10,000 out of pocket in this project. That should demonstrate fair commitment, no? The site has been live for 2 years and it isn't going anywhere anytime soon, and I'll see to that, without any investors. As for any investor wanting me to quit my job, I can't justify dropping my current primary source of income @ nearly 6 figures, nor would I expect any investor to ask this of me. It's a website project, with third party development work. I'm very capable of overseeing things while still working my 40 hour week (at another online company). Also, my initial question was for investor advice such as "where to find" investors or alternate sources of funding, not "what are" alternate sources of funding. I am terrifically aware of bootstrapping, debt funding, friends, family, angels and VCs. While you may deal with a higher scale of projects, I've been around the block some. Don't get me wrong, I do appreciate your candid feedback, however I don't consider this an early stage investment. The site makes upwards of $500/mo some months. Nothing major, I know. But it has the ability to get there. My point is, this project just needs that kick in the ass at the present to get there sooner than later. It's going to get there eventually, anyways. Cheers.
Hoyles, how about a WTS ad giving away x% of your business? Or contacting your local Business Bureau/Chamber of Commerce/Business Club to see if they have any venues to advertise for investment "partners"?