A couple of days ago, a Follower of mine on Twitter asked me if I qualified to be nominated for the Tech Crunch Crunchies for Best-Bootstrapped Startup: For a company that has raised less than $100,000 cumulatively from individuals, angels or others. Well I certainly qualify.
Last week, someone approached me at a networking event and said that he knew about SavvyAuntie.com - and that he had heard that the founder (me) had used some inheritance money to fund SavvyAuntie.com. I had never heard my business narrative put quite that way, but yes. That qualifies.
I'm a bootstrapper - an entrepreneur who believes in her idea so much that she's willing to invest her time and her life savings to make it happen. And I have.
But now it's time to expand. I need people. People means space. Space means hardware and software. Etc etc...
And yes, there's revenue, but it's far from what I've invested in the company, and far from enough to hire anyone to help me.
So I'm in the process of finding investors.
Fund-raising and writing plans is not my specialty nor within my comfort zone. I didn't start a business because I have a passion for spreadsheets and plans. I started it because I saw a huge opportunity to fill a market gap. Sure - I have a plan. And a clear vision for how to get there. But every day - no joke - every day I learn something new that can really change the paradigm. Plans work really well to sell widgets. But online media is such a moving target, it's hard to keep up - let alone plan around it. For example, I had no idea even 6 months ago what an effect Twitter would have on the success of my company.
Thankfully, I have a number of friends and angel investors who are interested in investing in SavvyAuntie.com Inc. They understand that the potential for this company is huge - and is much larger than the website alone. Plus - the fact that within the first couple of months after launch I was already getting revenue is really impressive - even to me.
But in order to get the funding - you have to give something back in return - a piece of the company I built with some funds my late mother left me 20 years ago when she passed away, and the sweat equity of 1 1/2 years of working every possible minute of every possible day on this site.
And in order to know what is fair to offer in return for an investment, you need to know how much the company is worth today - and how much it might be worth in a few years. That's called a 'valuation.'
And today - the market is rough. Heck, Citi Bank is selling for about $4 a share. And at the same time, Arianna Huffington raised another $15-$20 million for Huffingtonpost.com. So where does my optimistic little company play in all that?
Some say that investor money will be around in February. Others say it will be a much longer wait. Some are ready to invest today.
I have to admit that this part of the process has been the most challenging to-date. There are models and financial plans and a number of things that help an investor decide on his investment. (I say 'his' because so far only men have been interested in investing.)
And there's heart and soul and talent and passion that has to be offered in return.
And no one can really give me a sense of what is really fair to everyone.
And I'm speaking with people who really know about these things - and they say it's really hard to know. Based on his generous valuation, one says not to give much away at all. Another says that one day it will be worth a heck of a lot, but today it's worth much less and to give away a huge chunk in return for cash. Some say the only way to do it is to be one of twenty to present in front of a panel of angel investors, with only two being chosen. Nothing like feeling like a circus monkey. Sorry - too busy running a company to prepare for that kind of humiliation, in my honest opinion. But for some- that's the way it works.
The good news is that I am learning a lot. And I haven't yet made any mistakes.
But I'm skating on thin ice. Good thing it's getting colder out there. Hopefully when I finally do make the decisions they will be solid - for now and for the longer term.
There's a lot I'm planning for this company of mine. And every day that passes is one day closer to fulfilling those dreams.
All this time, I've been investing in me. Now, it's someone else's turn.
Have ideas and thoughts on what I should do? Have you been in this same spot yourself? Please comment here. Or email me at firstname.lastname@example.org.
PS - I am looking for un-paid interns. Best if in NYC, but there are remote opportunities as well. You'll learn a lot. It's really unavoidable.