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MenuShould I seek out an angel investor or crowdfund my new platform/app?
I need the funds to hire a reputable development team.
After much research, I decided I should hire the development team to create my platform/app (to get a reputable one) vs offering equity (which may result in a less than mediocre product.) Any advice helps! Thank you!
Answers
Hi:
Congrats on arriving at this important juncture in your business.
Regardless of how you decide to compensate the development team (or any other employees/contractors), your most valuable asset at this point is your vision -- rallying others around conquering a big, broad challenge is stickier than cranking out code for a platform/app.
Otherwise, please know that raising money will take longer than you anticipate, via either the crowdfunding route or the angel investor path. What is your plan for the period where you are developing the product but have received $0?
Lastly, I can't tell if you have an MVP, but if you don't yet, consider one of the many low-cost hacks that others have had success with -- presenting even a rudimentary version of your solution is easier than pitching a dream.
If you wish to discuss, send me a PM through Clarity for 15 free minutes.
Cheers,
Kerby
You should evaluate your starting point. Why should anyone give you money to do anything? Do you have a good reputation as an expert in the field? Do you have a demo, mvp, or anything that you already invested in the project? How far on the road with this idea are you. If you just have an idea, you are just starting with it, you have no cash, and you are not a known expert in the field that just wanted to start a business, then there is almost no chance someone to invest, no matter the funding method. So more details behind the story will get you better answers.
I have seen crowdfunding as more common with hardware products, and less common in software. You will need to do a lot more effort for a crowdfunding campaign then to get an angel investor.
My advice is to start by meeting at least several angel investors, take the feedback of what they see as an investment opportunity. If they decline, listen to the feedback and do your homework.
Take into consideration that you have the development team in with some equity, even if it's a slight amount. Perhaps even as a bonus, as it will be better to have them involved in the whole project lifecycle.
Raising capital is one of the biggest challenges any start-up can face, but fortunately, entrepreneurs have more than one option for getting the funding they need. Angel investing is a good option for start-ups to raise large amounts of capital without being constrained by the requirements that go along with taking out a loan. Weighing the loss of equity against cost can make it easier for start-ups to decide which option is best.
You can read more here: https://www.investopedia.com/articles/investing/010416/angel-investing-vs-crowdfunding-how-raise-money-your-startup.asp
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
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