How does one raise funds for a business subsidiary without selling ownership of the "brand" identity?

Back when I started LinkedIn wasn't as huge as it is now. I wish it was. I didn't have a large network and those networking sessions NEVER brought me any clients. I used to go to all sorts of them hoping to get clients. There were a couple of nibbles here and there, but never anything serious. The only thing that helped was reaching out DIRECTLY to people in my target market. That meant cold calls and cold emails. I'd sell myself while thinking about their needs. Once I got a few bites I'd build good rapport by keeping in touch, asking questions, repeating back what they were saying so that they knew I was on the same page and kept my promises. If I said I'd call them back next Tuesday at 2:15 I'd do so. Eventually I built trust with them without having a network, or an insane amount of experience. Oh and the most important thing about consulting is to LISTEN. When those first clients notice that you're truly listening and you're not selling the cookie cutter solutions everyone else is trying to sell them that's when you got them hooked. You start to understand their problems, fears, and see through their eyes and not just yours. A network will help, but in the beginning just good 'ol salesmanship will get the ball rolling.

Before I get to your question, let me give you a tip: always aim settle questions of payment before the work happens. It is ten times easier to agree on a price beforehand, and having done that doesn't stop you from changing it by mutual agreement later. The problem with paying cash is pretty obvious: you don't have a lot of it. The problems with paying equity are subtler. The first one is that early-stage equity is extremely hard to value. A second is that equity transactions require a lot of paperwork. Third is that entrepreneurs tend to value their equity much higher than other people would; if not, they wouldn't be starting the company. And fourth, people like designers are rarely expert in valuing businesses or the customs of of startup equity valuation. In the past, I've both given and received equity compensation, and it's a lot more of a pain than I expected. In the future, what I think I'd try is convertible debt. That is, I'd talk with the designer and agree on a fair-market wage. E.g. 100 hours x $100/hr = $10k. The next time we take investment, the $10k turns into stock at whatever price we agree with our investors, plus a discount because he was in before the investors. Note, though, that this will increase your legal costs and your deal complexity, so I'd personally only do this for a pretty significant amount of work. And I'd only do it for somebody I trusted and respected enough to have them around for the life of my business.

As Ken suggested, there is a wide breadth of mobile offerings and although there are some great "mobile only" funds, each investor / fund has their own thesis that makes them interested in some but disinterested in others. Also, if your revenue generating, you should seriously consider bootstrapping further. Revenue is treated very strangely in early-stage investing and *might* work against you. AngelList is a great way to research investors but not effective in actually connecting with them. Find investors who you are confident will be passionate about what you're doing based on prior job experience or what you know they are investing in. Happy to talk in a call to help explain this further if you need more clarity.

I'm a small-time investor and have been working for and with startups for 13 years. The time to take seed capital is: - When you've proven demand for your product by making sales. - When you have at least one repeatable, predictable, and profitable system in place for selling your product. - When taking an equity investment would let you grow the company faster than the other means that might be at your disposal: bootstrapping, debt financing, organic growth, joint ventures, etc. There's a trade-off. You want to get the idea validated up-front and get as far as possible as you can on your own, but not spend so much time doing this with meager resources that the opportunity passes you by. You don't want to give away the whole company to your investor, but you also don't want to stunt your growth and give up huge potential profits just because you were holding out for slightly better terms. The better your sales, and sales growth, the better the valuation you'll be able to negotiate. A great idea and a proof-of-concept alone are worth basically nothing. A company with sales is worth more. A company with sales growth is worth even more. A company with month-over-month sales growth, ongoing relationships with customers who repurchase, and steady-state profitability is worth *much, much* more. (Steady-state profitability means that if the company's number of customers stays the same, the business operations turn a profit. Often, early-stage companies that have a recurring-revenue business model will spend more to acquire a new customer than they earn from the first sale; the cost of acquisition is amortized over the lifetime of the customer. This is because they want to grow their recurring-revenue base and increase future profits at the expense of short-term negative cash-flow.) All that being said, if you think you will need venture capital funding in the future, you should start looking for it long before you're going to need it. Have a "Plan B" in place, too. Don't get stuck with your back up against a wall, hoping and praying that your seed round will close before you start bouncing checks. If your investor knows you're going to go bankrupt without the investment, they have a lot of leverage for getting very favorable terms!

I haven't seen a deal structured this way. Usually they get 6-10% equity I exchange for some small amount of money ( ~ $25k ) and tons of mentorship. 15% for $20k seems high ( you are valuing your company at $133k ) but there might be more to it. Accelerators are great specially for unknown founders. It gives them a fair chance of connecting to the people that well connected founders have access to and really get a shot at proving themselves. The accelerator should have access to great mentors, investors and previous successful founders. It should also be vested in the success of the company ( thus the equity ). If you sell them equity for the $20k, you don't owe any money if you fail. They get equity ( in very favorable terms ). If your equity turns out to be worth nothing ( I.e your company closes ) it's a loss for them and you but you should owe any money. Best of luck!