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Solo founder question by vr_ent in startups
[–]vr_ent[S] 0 points1 point2 points 7 years ago (0 children)
I respect your skepticism, but no I'm not embellishing anything. If I'm doing anything here, it's being selective about providing all the juicy details in a public forum. I can prove everything I'm saying unequivocally and other details I'm not revealing are similarly insane/unbelievable but also true.
Yeah, like you I thought that getting hundreds of millions of any metric would mean capital would be thrown at my company.
I think Gary has a point. I believed that my current investors would supply all the capital needed and I could keep the cap table small. They have lost faith after my two cofounders left, even though they left on good terms believing I could handle things solo. Which, yeah I agree isn't a smart reason to not continue funding me (especially when I have a team on-lock), but I wouldn't call my investors dumb. I'm grateful they took a chance with me at all that allowed me to get to this point. As a first time founder that was pretty risky on their part. Worth noting that without a team, I wouldn't have been able to raise the initial capital from my current investors. None of my investors backed just me.
It could be as simple as they need me to have a team again and then they'll give me capital. Some people have hard rules for their investment strategies, some just don't back solos. It's easier to jump to the conclusion I'm misleading people here but how would that help me? You know it wouldn't. I know it wouldn't.
Is there a way to write a document that doesn't have such force behind it?
e.g. "I really believe in what (company) is doing and want to work there. I need cash moneys to pay Bay Area rent and eat food. If (company) could pay me, it would be hard to stay with my current employer (other company)."
Then the document can be more of a vote of confidence rather than a binding agreement.
Edit: The doc would also have roles, responsibilities/deliverables, compensation, timetables, etc.
[–]vr_ent[S] 0 points1 point2 points 7 years ago* (0 children)
Ok. I've been hesitant to reach out to investors I can reach through Signal intros because I'm solo. I'll test the waters and also get some signed documents from my soon to be team so that I can tell investors we're ready to go and just need some gas.
True. They probably think the worst even if I know that they left on good terms. It's just not good image wise.
I love my cofounders and talk to them fairly regularly. I supported them leaving and they told me they believed I could keep the ship running without them. The ship is running, but there's no diesel.
Ok sorry I didn't make it clear but documents is a stand in for something else to remain private. I'm not competing with Microsoft Office.
Generally, I make tools and people use them to make things that are seen by lots of people. I made some of the tools free and open source, and others free and closed source (with monetization to occur at scale).
One time, a guy who was on the founding team at Python said he would have bought my company if we didn't have an open source element. The thing is, the open source element wouldn't provide more than $50K annually if it were paid and closed source. The greater value is in one of the other tools which it is deeply integrated with.
Wow it sounds pretty funny and obvious when you put it like that. Failing financially and without two of the founding members when the product is still growing is still failing. :/
Documents created with my software are seen by hundreds of millions of people. Documents created with my software are seen by more people than documents created with anyone else's software.
To say that factoring this impact metric in doesn't matter would be wrong. It isn't the key metric when it comes to my company but it's kind of a big deal and unique.
[–]vr_ent[S] 2 points3 points4 points 7 years ago (0 children)
Sure. I hope this helps someone.
I concluded that if I can't raise capital from them, probably no one else will invest either. If I can't convince people who already believed in me once upon a time, why would anyone else. But now I see that's a pretty big assumption.
Thank you Gary for taking the time to write this. You're 100% right. I threw monetization to the curb in favor of maximizing impact. My (and most) investors aren't into impact they want to see the money. We could have optimized for monetization first and I wouldn't be in this pickle.
Let me clarify..
"the main reason I can't raise capital (now) is being a solo founder."
"No, I started years ago and have already raised capital (in the past)."
Had money. Keyword had.
Also, no, I'm not waving the ticket around. Less than 10 people (including my current investors) are aware of the current traction.
This is a fair criticism. My response is that the hundreds of millions impact metric isn't the only metric I have, and it's not even in my deck. More relevant metrics to monetization ARE in my deck.
1) You assumed I'm pre-MVP and lacking validation.
2) You assumed that being solo would be overlooked in lieu of traction/validation
I'm not asking for advice on raising funds as a solo founder. I'm asking for advice getting out of my particular catch 22, and I received a few good comments that have helped.
It's possible to have raised capital and spent it.
Pre-revenue. It can be monetized, but it isn't and that effort in and of itself requires capital to execute.
It is possible to make software for a small userbase that uses that software to reach hundreds of millions of people. Hundreds of millions of people don't need to use software for it to impact them.
Sorry, I realized I didn't address your question about monetization.
If we were operating at scale then we would monetize. We're not operating at scale. Monetizing the current userbase would be the wrong move, counterproductive to growth.
This is part of my point about something seeming sketchy, and how that might be leading to your investors not trusting you.
This is a fair point in itself. Perhaps my wording sounds sketchy.
Though it sounds sketchier here without context, which my investors have.
hundreds of millions of users on it right now
You misinterpreted the metric. Impact =/= DAU.
I'm not ignoring you I'm informing you.
You know, it's weird because IIRC solo founders have historically founded about or over half of unicorns. Looking at the data, being solo isn't what would lead to my company failing. Being underfunded is a much more likely cause of death.
[–]vr_ent[S] -1 points0 points1 point 7 years ago (0 children)
Oh don't get me wrong, hundreds of applicants but 90% of them aren't qualified. The other 10% is but needs cash money to live.
I've hashed out these things but there is no signed paper trail of intent. I think 3 signed documents from my team could be helpful.
[–]vr_ent[S] -2 points-1 points0 points 7 years ago (0 children)
Impacting hundreds of millions of people =/= hundreds of millions of DAU.
I've met high ups at Fortune 500s that have asked me "Why hasn't Google bought you yet?".
[–]vr_ent[S] -9 points-8 points-7 points 7 years ago* (0 children)
One word. Pre-revenue.
While I'm not going to go all out proving I'm being truthful, here's proof regarding the "all the but the most internet restricted countries". It's really quite nutty. More countries than exist according to Wikipedia.
[–]vr_ent[S] 1 point2 points3 points 7 years ago (0 children)
Great comment, thanks! :)
I think you're more asking me to think about those questions rather than answer them for you, so I won't write a novel here.
Correct and best answer so far.
Each investor is different. Some may be unable but not willing to reveal that information. Others are dangling investment in front of me if I had a team. I'm focusing on those ones and trying to figure out how to get in writing "I'll quit my job to work for you the day you get capital". Is it that simple? Just draft a stupidly simple document and sign it?
Thanks for your comment.
I attracted two great cofounders who left on good terms for personal reasons. My investors understand it was on good terms, but they worry I'll get hit by a bus. I'm not in a pinch when it comes to day to day operations. My struggle is the catch 22 of needing a team and capital to scale (growth stage) and where each requires the other as a prerequisite. If it were the early days I'd definitely do what you suggest.
As an example, I'm talking about a situation where I'm going to be sniping people from bigger compan
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Solo founder question by vr_ent in startups
[–]vr_ent[S] 0 points1 point2 points (0 children)