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Ask HN: My startup is running out of fund. What should I do?

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Re: Ask HN: My startup is running out of fund. What should I do?

#21

Post by whentojoin »

jasfi wrote: post #18
whentojoin wrote: post #5

Earlier quoted context omitted.

It needs millions of dollars to launch the product though.

Is that all marketing cost? What exactly makes up the millions of dollars? Because there are bootstrappers that launch successfully by growth hacking, although that is admittedly difficult to do.

I left it intentionally vague for privacy.

That is the money need it to make the product valuable to users. Without it, the product provides 0 value to users. Let's say there are many companies in this space, all spend at least that amount of money to launch.

$0 of these millions is on marketing.

Re: Ask HN: My startup is running out of fund. What should I do?

#22

Post by Melting_Harps »

whentojoin wrote: post #20
Melting_Harps wrote: post #16

> What are your guys thought? Former fintech co-founder: I boot-strapped (VC and incubators expressed interest but wouldn't give term sheets because of Bitcoin's 'gray zone' reputation) and with this current tech-apocalypse afflicting the entire Industry I fear you will have a very hard-time raising anything without showing revenue right now. The fat is being trimmed even on the most established of companies, and I f…

Why would you enter a market that requires that much in run-way and think that this is a viable option let alone that could succeed given the current incumbents? >> To answer your question, we enter this industry as completely new-comer. If we know what we know now, we agreed we should have never started this business in the first place. Also we have 0 founder-market fit, and that should be a big reason why no VC fun…

> To answer your question, we enter this industry as completely new-comer.

So were we, in fact it had never been attempted before because of the aforementioned legal implications, despite the obvious use-case in the MJ Industry--we had to turn them down despite the immense demand from the MJ side because of the legal landscape.

I think it's time to have a very serious chat with your team and break-down why this didn't work out and learn from this; but just the monetary outlay needed to make this work is entirely untenable to me. Hopefully you can leverage the skills you learned to use in future projects/jobs, because it seems it's time to cut your losses.

> I am wondering if I am being a bad person.

99% of startups fail, and no one is a 'bad person' unless they embezzle funds or back-stab/sabotage their co-founders/team (which sadly happens all the time) in my POV. This is just a reversion to the mean when easy-funding, only possible due to ZIRP, has dried up.

Re: Ask HN: My startup is running out of fund. What should I do?

#23

Post by whentojoin »

vaidhy wrote: post #19

Just remember that doing a startup is risky and all of you took that risk - you, your cofounder, your investors and your employees. Sometimes, risk pays off, but most of the time, it does not. Playing the guilt game just makes is an emotional blackmail and you need to learn to recognize it as such. You do not have to all-in in something you do not see a good chance of success. Knowing when you fold and walk away from…

This is the first time I encounter that. The more I think about it, by "you have to all-in in something even if the company runs out money" standard, I suspect even majority of unicorn founder won't start the company in the first place.

Re: Ask HN: My startup is running out of fund. What should I do?

#24

Post by HWR_14 »

whentojoin wrote: post #13
naet wrote: post #11

Earlier quoted context omitted.

He can hire someone to replace you if he thinks it can succeed. Or continue to work on it on his own without you. He sounds like he is being a bad person if he's keeping you there against your will or using guilt as a motivator. You are vague about what your startup is or what the issue is preventing your launch. If it's ready, just launch it on zero budget and see what happens. If you need more money it isn't ready.…

I am intentionally making it vague to protect the privacy. But the business we are in require millions of dollars to launch (after the code is ready). Without that much of money, the product provides 0 value. --- He can hire someone to replace you if he thinks it can succeed. Or continue to work on it on his own without you. >> You are spot on. I am not stopping him from doing that. This makes me feel much better. Th…

--- He can hire someone to replace you if he thinks it can succeed. Or continue to work on it on his own without you.

>> You are spot on. I am not stopping him from doing that. This makes me feel much better. Thanks.

If you want to go this route, letting them move on while you do something else, you have a major consideration. You own a giant chunk, maybe even a majority, of the equity. That can make it hard for them to be motivated, hard for them to make legal decisions, hard to get investments, etc. Consider selling (or giving if you really think it is worthless) enough to the partner you are leaving behind so that they can succeed. Or just make it easy to dilute you (I assume it's a tax question which is better).

If you do, feel free to make it fair to you as well. Maybe you get to use some code in another project in a dual-use situation? Maybe your cofounder vests the chance to buy your stock over a few years so he doesn't just cut you out and then pocket everything as it dissolves? Retain a fair amount of equity for the work you already did.

Re: Ask HN: My startup is running out of fund. What should I do?

#26

Post by _448 »

May we all know what this startup's product is? If your co-founder really believes in the product then do something that one of the co-founders of RethinkDB did, keep working on the product as a side-project. Nothing stops you both from working on it as a side-project, even open sourcing it could give it a new life and open up new opportunities.

Re: Ask HN: My startup is running out of fund. What should I do?

#27

Post by janstice »

Can you sell the whole things as a ready-to-launch product to a funded org that’s either in the market, or wants to be?

If neither you nor your co-founder have the multiple millions to launch, if you drag the runway out by self-funding (and taking on a bunch of consumer debt), I suspect that in 6 months time you will be in the same position you are now, but on the verge of bankruptcy (or over the edge…). You have no winning position by continuing the same path you are in.

Re: Ask HN: My startup is running out of fund. What should I do?

#28

Post by _448 »

whentojoin wrote: post #21
jasfi wrote: post #18

Earlier quoted context omitted.

Is that all marketing cost? What exactly makes up the millions of dollars? Because there are bootstrappers that launch successfully by growth hacking, although that is admittedly difficult to do.

I left it intentionally vague for privacy. That is the money need it to make the product valuable to users. Without it, the product provides 0 value to users. Let's say there are many companies in this space, all spend at least that amount of money to launch. $0 of these millions is on marketing.

What are you launching, a spaceship with millions of dollars? And how is sharing what your product is a privacy issue? This all really sounds odd to me.

Re: Ask HN: My startup is running out of fund. What should I do?

#30

Post by joshxyz »

if i'm in your position, i would stop everything i'm doing and would spend my time doing pre-sales and closing deals. sales fixes a lot of problems, and at this point it's also your next ticket to getting your next funding: by creating and retaining some traction in the most ramen profitable way.
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