Just grow the business. You can "take it to the next level" by just making money and reinvesting it in the company.
Tell HN: My startup is making money and I don't know what to do
11–20 of 134 posts
Re: Tell HN: My startup is making money and I don't know what to do
#12Awesome idea. I'd love to have a site like this in my country
Re: Tell HN: My startup is making money and I don't know what to do
#13First, decide if you really need to raise money. Can you bootstrap (ie, self fund) your business? Too many people immediately go for capital when they don't need it. It's extremely distracting and not all that necessary. You should only look into raising capital if you have a capital constrained opportunity or problem. So many problems initially look like money problems, but they're really disguised as something else (culture, product/market fit, market timing, etc). Usually, it's best to really get to know your market really well first, before reaching for funding.
Second, make sure your legal documents are in order. Incorporate, if you haven't already, and open up a business bank account. Make sure to use your business bank account for all business related expenses. This will make accounting much easier down the line.
Third, hire a great bookkeeper. Trust and loyalty is really important here, so best if you hire someone who is somehow connected to you.
Fourth, hire a great accountant. Some accounts will also do bookkeeping for you. I don't think this is a good idea, as you typically want someone "on your side" watching out for your day to day finances. Intelligence and industry expertise is really important for an accountant.
Fifth, if you're making real money, it's important to put some words on paper about how the company ownership is divided, and other "what if" scenarios. You typically also want some sort of Operating Agreement between the founders. Usually this document covers: 1) ownership division 2) provisions for terminating members 3) provisions in case of long term disability or death of a member (for example, do you all of a sudden want your cofounder's spouse or parents as your cofounder in case of death? Look into "key man" insurance.) 4) provisions for adding new members
Some people say get a lawyer for these documents, which isn't a bad idea, but most of these types of documents at this stage is pretty boilerplate. If you have some unique circumstance, like an international cofounder or something like that, then perhaps consulting a lawyer is best.
Re: Tell HN: My startup is making money and I don't know what to do
#14How 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…
We're actually at three schools in California--Loyola Marymount University in Los Angeles, Chapman in Orange, and the University of San Diego. We've been able to replicate our success pretty similarly in three unique areas, and have plans for Campus Reps/Brand Ambassadors to help us out "on the ground" at some of the larger schools we're planning on targeting.
Re: Tell HN: My startup is making money and I don't know what to do
#15Have 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…
First things first, get an advisor. You need someone whose been down this road before to mentor you. Not to downplay your intelligence, but as I decided to launch a company this summer, I went through to all the individuals in my network that could at least give me advice when it came to operations, growth, product development, etc. Although it happens less, there are times where startups fail because they balloon too fast.
Based out of LA: https://www.techcoastangels.com/
http://www.maverickangels.com/
https://angel.co/los-angeles/investors
Also, you may want to check here: http://thefunded.com/
This offers reviews of investors / investment syndicates. I can't speak to its accuracy, but it will at least provide some context.
Good luck.
Re: Tell HN: My startup is making money and I don't know what to do
#16You should sit down with the team and work out the unit economics per city.
This will give you a tangible and precise target for what it takes to make the next city profitable. (E.g. "70 apartments available, 4 ad sponsoring business for break even.")
Once you have that you can do like all franchise models do, reinvest your profits organically for company-owned cities and let franchisees come in to fuel growth beyond that, with the process manual based on the cities you did yourself.
You got to where you are by focusing on just the client. Think hard before spending time trying to play the venture capital game.
Re: Tell HN: My startup is making money and I don't know what to do
#17I have a few associates that would probably invest in this type of company rather quickly. Drop me an email if you want me to pass your name along.
Re: Tell HN: My startup is making money and I don't know what to do
#18First, decide if you really need to raise money. Can you bootstrap (ie, self fund) your business? Too many people immediately go for capital when they don't need it. It's extremely distracting and not all that necessary. You should only look into raising capital if you have a capital constrained opportunity or problem. So many problems initially look like money problems, but they're really disguised as something else…
Getting into an accelerator or incubator (even if it's one that's not popular) can really help with the legal stuff since you'll be able to get more advice and they will always have those boilerplate docs for you.
Form a C corp in Delaware and get the ownership figured out ASAP. I also generally think that all of the founders should vest (no cliffs or anything, but a four year vest for everyone will keep the company safe in the event one of you leave, even the CEO).
I agree with cglee's comment that you don't need capital right now, get more traction and build more product. Then in six months revisit the topic and determine if your organic growth is enough to sustain further growth or whether you'll need capital injection.
Raising money, btw, isn't always just about the money - if you pick your investors correctly they can help you and your business tremendously.
Re: Tell HN: My startup is making money and I don't know what to do
#19i can accept it , and invest in giving scholarship and fund projects to students in my country , and train them, so after that you can had low cost and happy human resources happy to work with u, invest in train people
Re: Tell HN: My startup is making money and I don't know what to do
#20Are you paying yourselves salaries? Do you have an actual office? Benefits? etc? I would suggest that you not get ahead of yourself with "making it big" and instead focus on making it a solid business. Get to the point where you're paying yourselves and everyone who works for you a market rate salary and benefits, and you have office space, and you're cash balance is growing. Basically this is the classic definition of being 'profitable' (you have net income). Then hire a CFO.
The CFO will help you organize your thoughts around how much money you make and need to make in order to maintain a level of profitability. Then take your net revenue and feed it back into the business, pick up your next campus. Work on the process for organizing a campus, what you need to know who you need to contact. You will be able to start hiring sales people. These people should be paid based on advertising sales delivered, not 'leads generated'.
Once you've got your next campus, quickly post mortem what went well and what didn't. Then move on to the next one.
As you add campuses your revenue stream will increase and you will be able to add additional engineers to help integrating the data. Every million dollars a year in revenue shines more light on what works and what doesn't in your business.
Have fun, enjoy the experience of all the things you are learning, (even the bad things teach something).