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How to proceed when you run out of cash, but you still believe?

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Re: How to proceed when you run out of cash, but you still believe?

#111

Post by thehappypm »

HenriNext wrote: post #103

> "We are a team of 8. We are 2 full-stack, 1 iOS, 1 Android and 4 product people." And that leaves 0 for business + marketing + sales. Maybe you didn't find the right business model during 5.5 years because you had nobody working on finding the right business model?

1:1 engineer to product person ratio seems off to me, especially for a small company. Even if that person has to do product/sales/evangelism/marketing, you should really need 2 or 3 people max if you only have 4 engineers, especially when those engineers are building so much from nothing.

Re: How to proceed when you run out of cash, but you still believe?

#113

Post by alasdair_ »

nikanj wrote: post #71
bobloblaw45 wrote: post #64

Earlier quoted context omitted.

I know this might sound stupid but if you can get that much for something that wow's people, can you get like 100k for a "meh" idea? Like if you wanted to open a dry cleaners.

As parodied some 5 years ago: https://medium.com/signal-v-noise/press-release-basecamp-val... Once you make money, it's much harder to come up with outlandish numbers. A dry cleaners has a well-established range for revenue and profit, so it's hard to justify why it would be worth $100 billion.

>Once you make money, it's much harder to come up with outlandish numbers. A dry cleaners has a well-established range for revenue and profit, so it's hard to justify why it would be worth $100 billion.

If you want a cleaning company worth hundreds of millions, try ZZZZ Best https://www.investopedia.com/terms/z/zzzzbest.asp

Re: How to proceed when you run out of cash, but you still believe?

#114

Post by whateveracct »

scarface74 wrote: post #104
dwrodri wrote: post #26

As someone who is interested in one day starting my own business, I have nothing but respect for someone who has the guts to follow through with that and pursue their vision. That being said... why did you (or if anyone else can chip in) decide to chase funding when you didn't have a business model? Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be…

I’m no fan of the startup and HN definition of success being valuation, revenue, or market cap while ignoring (the lack of) profitability. But from a cynical standpoint, why not take VC money if you can get it? It seems like you should take VC money if you don’t have a business model that would lead to being a profitable ongoing concern. If I can see profitability, why would I give up equity? You let other people tak…

Yep, worst case you get lil nice wealth transfer from VCs to the people in the company, all for being an entrepreneur!

Re: How to proceed when you run out of cash, but you still believe?

#115

Post by alex7o »

thehappypm wrote: post #110
nostrademons wrote: post #45

Earlier quoted context omitted.

> Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be acquired by someone else? That's pretty common, and is basically what seed funding is . The paradox behind markets and investment is that logically speaking, if a potential company has a profitable business model, that company should already exist. After all, with millions of potential entrepreneu…

"After all, with millions of potential entrepreneurs across the globe and trillions in funding chasing them, the chance that an obviously profitable business model hasn't already been dreamed up and implemented by an entrepreneur is basically nil." This basically amounts to "everything that can be invented has been invented". You sure?

No, more like you should invent a new way of selling things, otherwise the market would have found a way to sell them already.

Re: How to proceed when you run out of cash, but you still believe?

#116

Post by josephjrobison »

devit wrote: post #77

Assuming this can recommend clothes that someone is going to immediately love based on previous purchases, this seems incredibly valuable for all the fashion e-commerce sites starting from Amazon, and could in fact turn any large site with this technology into a monopoly at least until someone replicates it. Of course it needs to actually work though, which is not clear from the article (categories like "comfy" aren'…

I agree with you, the product looks pretty cool and promising, and seems it could be a good fit within Amazon or something with a vast array of clothes.

Re: How to proceed when you run out of cash, but you still believe?

#117

Post by daxorid »

AchieveLife wrote: post #30
dwrodri wrote: post #26

As someone who is interested in one day starting my own business, I have nothing but respect for someone who has the guts to follow through with that and pursue their vision. That being said... why did you (or if anyone else can chip in) decide to chase funding when you didn't have a business model? Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be…

"Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be acquired by someone else?" That's a sane question. IMO it's the current financial environment that encourages such "leap without looking" strategies. Fear of missing out is huge right now. I know of a startup that received a multi-million valuation and many more million in funding. They don't even…

Indeed. The flip-side to this is that speculative investment on unprofitable moonshots seems to be where ALL the equity-finance money is.

My company reliably earns low-7-figures on high-7-figures revenue, with respectable but not amazing growth, but the only capital "market" open to us is bank loans and merchant financing.

Nobody cares about boring profitability.

Re: How to proceed when you run out of cash, but you still believe?

#118

Post by Animats »

"An In-Bedroom Fashion Stylist that understands the user and her taste and knows what clothes she has in her closet." That's from Clueless.[1]

Is there anybody who really wants that? People with too much money and no fashion sense? Is that a market?

[1] https://www.youtube.com/watch?v=XNDubWJU0aU

Re: How to proceed when you run out of cash, but you still believe?

#119

Post by x0x0 »

tenpies wrote: post #61
jassmith87 wrote: post #58

Earlier quoted context omitted.

Seed and Series A is investment in the people always. They assume if the product doesn't work the team will pivot until they find something that does. It sounds to me like your friend failed to pivot when needed.

Not even. I'm seeing seed and series As/Bs on unproven teams of recent graduates with no experience in the field where the "start up" operates. No business plan, no prototype, huge regulatory walls to climb. It is worst than tulip mania.

Dude. Conflating seed (median $2.1m 18q4) rounds with B (probably 10x that) rounds is... not serious.

Re: How to proceed when you run out of cash, but you still believe?

#120

Post by inventtheday »

scarface74 wrote: post #104
dwrodri wrote: post #26

As someone who is interested in one day starting my own business, I have nothing but respect for someone who has the guts to follow through with that and pursue their vision. That being said... why did you (or if anyone else can chip in) decide to chase funding when you didn't have a business model? Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be…

I’m no fan of the startup and HN definition of success being valuation, revenue, or market cap while ignoring (the lack of) profitability. But from a cynical standpoint, why not take VC money if you can get it? It seems like you should take VC money if you don’t have a business model that would lead to being a profitable ongoing concern. If I can see profitability, why would I give up equity? You let other people tak…

its not taking the money thats the problem. spending it is the problem because it accelerates your burn rate
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