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Beware self-funded Startups: failure can haunt you for a long time

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Re: Beware self-funded Startups: failure can haunt you for a long time

#21

Post by StartingOver »

alain94040 wrote: post #19
Maro wrote: post #10

With all due respect, I don't think those are the correct lessons to be learnt. The lesson is: don't take on debt. Get investors. If you can't get investors, bootstrap, do some gigs on the side, and use that money to run the company. Then, get investors. If you can't get investors, well, repeat until... If you do this for a long enough time, and the idea, product, company, team and timing is right, you will be able t…

Don't take on debt secured by you personally. Your business should take on the debt. I know it's easier said than done, because no one will loan anything to a business with no revenue. By agreeing to personal debt, you pledged personal money that you didn't have. I guess different people have varying levels of risk, but I don't invest money I don't have.

There is another important lesson: you can't get business loans or credit cards (the big culprit here) without personally signing for it. BUT: there is probably some point in time that changes, and you should be on top of things and cancel the original. Too late now.

Re: Beware self-funded Startups: failure can haunt you for a long time

#23

Post by StartingOver »

samh wrote: post #7

You firstly need to realize that mood is like the weather, it's never permanent. You have some real practical problems to deal with, but no more than lots of people, no more than lots of people who you admire have dealt with. You need to talk to the organisations you owe money to, you need to negotiate a payment plan you can actually afford. You need to listen to this interview with Rand Fishkin, http://mixergy.com/s…

Thanks! It took longer to accept the situation I'm in, than it will be to start doing new things, I hope.

Re: Beware self-funded Startups: failure can haunt you for a long time

#24

Post by StartingOver »

cma wrote: post #15
gte910h wrote: post #6

Sounds like you need cut bait and run and to declare personal bankruptcy. In 3 years of reasonable payments you will have all your debt gone (or if you have no assets outside a house and cheap car, chapter 7 even, with your debt gone near instantly). Chapter 13 doesn't last a long time, and was designed for your case. The point is not to take a productive citizen and hang upon a yoke of debt for much of their life. I…

They went through pre-Bush bankruptcy-law bankruptcy or post? http://msnbcmedia4.msn.com/j/msnbc/Components/Photos/050420/...

The answer to that can make a big difference.

Re: Beware self-funded Startups: failure can haunt you for a long time

#25

Post by StartingOver »

ig1 wrote: post #5

Can you raise investment or sell the company outright ? - if you've got millions of users then it might be viable route.

Sell might be an option. One of those things where there was an offer a while back, perhaps they will take it for a song. But otherwise, how to go about it?

Re: Beware self-funded Startups: failure can haunt you for a long time

#26

Post by jellicle »

gte910h wrote: post #6

Sounds like you need cut bait and run and to declare personal bankruptcy. In 3 years of reasonable payments you will have all your debt gone (or if you have no assets outside a house and cheap car, chapter 7 even, with your debt gone near instantly). Chapter 13 doesn't last a long time, and was designed for your case. The point is not to take a productive citizen and hang upon a yoke of debt for much of their life. I…

> The point is not to take a productive citizen and hang upon a yoke of debt for much of their life.

That may have been true once upon a time, but is certainly no longer true since the 2005 bipartisan bankruptcy reform law, which had the specific intent of hanging yokes of debt on productive citizens.

Re: Beware self-funded Startups: failure can haunt you for a long time

#28

Post by StartingOver »

alain94040 wrote: post #19
Maro wrote: post #10

With all due respect, I don't think those are the correct lessons to be learnt. The lesson is: don't take on debt. Get investors. If you can't get investors, bootstrap, do some gigs on the side, and use that money to run the company. Then, get investors. If you can't get investors, well, repeat until... If you do this for a long enough time, and the idea, product, company, team and timing is right, you will be able t…

Don't take on debt secured by you personally. Your business should take on the debt. I know it's easier said than done, because no one will loan anything to a business with no revenue. By agreeing to personal debt, you pledged personal money that you didn't have. I guess different people have varying levels of risk, but I don't invest money I don't have.

Another lesson: you may think it is a business card (it is), but surprise! They can convert to personal (read the fine print).

Re: Beware self-funded Startups: failure can haunt you for a long time

#29

Post by chailatte »

alain94040 wrote: post #18
chailatte wrote: post #13

Take out equity loan against house, pay off your credit card. Be ready to walk away from your house if you have to.

Bad advice: trade a non-secured debt (credit card) by a secured one, so that indeed, you may lose your house, whereas before you weren't actually losing anything (bad credit is annoying, but doesn't force you to become homeless).

Housing prices will fall 50% in the next year or two.

Re: Beware self-funded Startups: failure can haunt you for a long time

#30

Post by StartingOver »

mgkimsal wrote: post #14
pedalpete wrote: post #11

How did your credit line get expanded without you knowing it? A key detail I was not aware of is 'business cards get switched to personal cards when not pain on time'. That's a bit one that we should all be aware of (though I don't have a business card yet, good to know).

I've had credit lines expanded on me with just a letter in the post saying "we've upped your credit line". I didn't ask for it. Granted, I still keep up on stuff regularly, and noticed quickly, but it wasn't something I applied for. In some situations, I can imagine a busy person not noticing for several months.

Yes, particularly if you aren't the one doing the financial reports (which stopped by the way, along with bills getting paid, etc., etc).
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