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Tell HN: My startup is making money and I don't know what to do

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Tell HN: My startup is making money and I don't know what to do

#1
I started University Niche[0] with two friends to help college students find places to live off-campus around their universities.

If you've been through the college system in the US, chances are you know how difficult it is to find a house to rent. Many landlords will simply hang up the phone the second you tell them that you're a college student. University Niche is a database of rental properties that are open to renting to college students, with information curated specifically toward helping students find the best places to live.

We launched April 2014, and are now at three universities. We've seen a lot of success (~40% w/w growth, 100%+ m/m growth).

For many students, this is their first time living on their own, so we wanted to sell ad space to small businesses that would help students with their move (storage, furniture, etc.) and then to small businesses that would help them once they're situated (grocery stores, gyms, etc.). I coded up a basic self-serve advertising platform, and my cofounders and I went and found a local moving company. Walked in the office, talked with the owner for about 15 minutes. Sale.

Went to a mattress store. Sale.

Small restaurant, same thing.

We've walked in to six random businesses, and only one said no.

So we're pretty excited it works, but we have bigger plans than this. We have projections and budgets to expand to 150 schools nationwide.

We know how we're gonna do it and we know how much it will cost, but we are all at a loss for how to take that next step.

We have a validated product and now a validated revenue model. We've got traction. But we don't have the funds to take this thing to the next level, and we don't know how to meet the people who can help.

Anyone have any advice or been in a similar situation?

[0]http://universityniche.com

Re: Tell HN: My startup is making money and I don't know what to do

#3
post #2

Perhaps you're ready for Series A: http://avc.com/2014/06/what-seed-financing-is-for/

We've never raised money before this. We definitely want to do some kind of seed round, but we don't really have the connections to find the right people.

We're all new to this game. We went to a few "pitch nights" back in March when all we had was an idea and a barely functional MVP, but they're all really theatrical and honestly we'd rather just sit down and talk with someone. We just don't have a clue about how to find those people.

Re: Tell HN: My startup is making money and I don't know what to do

#4
Have you raised a family and friends round? What amount of capital are you looking for? If you just launched 3 months ago, I'd say seed level, but I don't have enough specifics on what you need / burn rate to judge.

Depending on where you're based, I would look at getting in touch with some of the angel investing syndicates. Also, be realistic about the runway you're giving yourselves. My personal philosophy is to meet with investors in my network right at launch (not for money, but to alert them that I might be coming to them at some point). These relationships take time, and even an angel investment can take a month or more for due diligence. Expect Series A to take months longer.

Given that you're not currently in touch with angels, I would start identifying 1-2 groups in wherever you're based (I hope the answer is a larger metro area). Find out if you have a mutual contact. If not, and I hesitate to say this, but make a cold call to the angel / angel group. You don't have anything to lose.

Re: Tell HN: My startup is making money and I don't know what to do

#5

Have you raised a family and friends round? What amount of capital are you looking for? If you just launched 3 months ago, I'd say seed level, but I don't have enough specifics on what you need / burn rate to judge. Depending on where you're based, I would look at getting in touch with some of the angel investing syndicates. Also, be realistic about the runway you're giving yourselves. My personal philosophy is to me…

We haven't raised anything. We're three broke college students who have been putting everything we have into keeping this thing going.

We're planning to expand to 150 campuses and bring on some people to man the phones/maintain our property listings, as well as hire campus reps/brand ambassadors at 20 key schools from that set of 150. Our 1y budget for all of this is And yeah, we're based in LA, but we're all new to this and don't exactly have any connections with anyone in this industry, so we'll definitely start researching some groups and, I suppose, calling until someone wants to talk to us.

Thanks for the advice!

Re: Tell HN: My startup is making money and I don't know what to do

#6
post #3
post #2

Perhaps you're ready for Series A: http://avc.com/2014/06/what-seed-financing-is-for/

We've never raised money before this. We definitely want to do some kind of seed round, but we don't really have the connections to find the right people. We're all new to this game. We went to a few "pitch nights" back in March when all we had was an idea and a barely functional MVP, but they're all really theatrical and honestly we'd rather just sit down and talk with someone. We just don't have a clue about how to…

Why do you want to raise money (i.e. sell part of the company)? It sounds like you can grow organically, maybe raising your prices is in order?

Re: Tell HN: My startup is making money and I don't know what to do

#9
How do you plan on replicating in the new cities? Is the unique element in this equation (it's certainly not the space that is novel) you and your team?

Track record goes a long way. You've proven to be effective in a very small 'niche'. You may want to consider taking seed (if needed) from F&Fs and then prove it in another city. You may find that expansion step to be useful. It will also help answer the question of expansion for potential institutional investors.

Re: Tell HN: My startup is making money and I don't know what to do

#10
1) Check online for investors. Angellist would be a great place to find Local Investors interested in your space.

2) Search online for angel groups in the area and go talk to them. See if anyone in that group is a connection somehow to do a warm call instead of a cold call.

3) Tell your friends and family what you are up to and ask them if they know anyone that is an angel. If you find an angel that isn't interested in your industry, they probably know other angels, so you can ask them to reach out.

4) Ask the university for help finding people that are investors. They would probably love to help and have a success story come from their college.

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