Need tips for startup funds

Tabor88Tabor88 subscriber Posts: 3
edited July 2008 in Startup Funding
I have a website idea that I`m having developed.  I have and attorney that is working with me for equity in the business, and I also have a really high-end web design company out of NYC that is interested in partnering to build the site.  They have offered to build my prototype site for a highly discounted rate in exchange for equity in the business and the guarantee that they will build the full-blown site once the actual funding is in place.  
My question is;I need to raise money to pay for my end of the prototype site to be built.  I`m looking for somewhere between 5-10k for the site and marketing funds.  Two of my best friends have parents with money who may be interested and I`m wondering what type of deal(s) I should / could offer them in exchange for funds? Thanks!MatthewTabor887/27/2008 2:25 PM

Comments

  • robertjrobertj Tampa Bay, Floridasubscriber Posts: 0 Member
    Matthew,
    Normally, I would suggest that you discuss the detail of your "offer" with your attorney (if they are a qualified securities specialist) - but since he/she is also an owner there may be some parochial interest on his/her part.
    Also, when you agreed to use equity as payment for services - you essentially established a "valuation" for your business - so you need to consider how that plays into your next deal.
    Finally, $5-10K is a pretty small amount for a securities type deal (often called equity exchange) and I suspect you will probably need considerably more in the future - so you may want to consider some type of debt deal.
    Has the business structure been put in place? 
     
  • Tabor88Tabor88 subscriber Posts: 3
    Thanks for your reply Robert.
    Yes, we will need considerably more funds in the future and we are still in the incorporation process.
  • robertjrobertj Tampa Bay, Floridasubscriber Posts: 0 Member
    If you are in process of incorporating then you haven`t consumated formal equity agreements with the attorney and web company?
     
  • JLoveJLove subscriber Posts: 2

    Can`t you get a convertible loan (convert to equity at some point in time)?
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