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14Feb/09N/A10

Common Email

Today I wrote an email reply to an entrepreneur I've written a hundred times since I've been on the VC/startup advisor side of the table. It's an email I wish I had written myself nearly three years ago when I began my BricaBox quest, and so I'm releasing it to the general public as the "Common Email," under a Creative Commons license. Feel free to copy, paste, and send to any entrepreneur seeking funding too soon and being unnecessarily canny about his/her plans!

Hi, without knowing more specifics about your startup, I can only assume that without even a prototype you're too early to be seeking funding. I'd work on getting the product finished and out in the open, being widely used.

Theses days, it's a rare case (usually proven entrepreneurs an investor has worked with before) that something not-yet-built or even not extensively used gets a real look from investors let alone investment.

Also, I'd adjust your thinking a bit about what "bootstrapping" means. $200,000 is a real Angel round these days. Bootstrapping means using your own money (or that of close friends and family), and usually less than $50k of it, to get something built and in the market, gaining adoption or customers. One company we invested in last summer was nearly cash-flow positive upon investment, and they had only spent $15,000 getting to that point.

Lastly, building a User Generated Content (UGC) site without one or two technical co-founders is going to be super tough, because its both hard to innovate and cut through the noise in the space. If your idea is truly great, and you have the prowess to breakthrough the flurry of UGC sites launched everyday, I think a good entrepreneurial test will be either finding a person or firm that shares your passion and wants to work with you for free or equity, especially if you don't have the funds personally to get this built by paying someone. (Of course the flip side of this is finding an investor who is also equally passionate about the product you want to build and also has the desire to bankroll the first iteration of the project.)

It goes without saying, all of this is tough!

I hope this feedback is valuable. If you'd like to pass on more specifics about your project, I'd be pleased to give more specific feedback. But, from the outline you gave me, I think your best bet is to forget investors for the while and get building!

Regards,

Nate

About Nate Westheimer

Nate is the Co-Founder and VP Product of AnyClip. He is also the Organizer of the 10,000 member NY Tech Meetup.
Filed under: Entrepreneurship, Web Startup Leave a comment
  • Chris
    "UCG" should read "UGC", but otherwise an excellent article, thanks.
  • Corrected. Thanks!
  • Thanks for posting this. One small point: you certainly meant "your" in this line: "If you’re idea is truly great."
  • Changed. Thanks (perhaps the common email should be a wiki).
  • I'll try to make a comment other than spellchecking - but "Bootstapping" is "BootStrapping"

    Of course, you knew that my comment would be sales-based, but I think your most important point is "gaining adoption or customers." Today... its about the ability to show that you can get to cash-flow break-even. Having a "cool" product isn't enough. You need to show that people will PAY for it - or there is some other model (data, advertising, etc) that can cover your costs.
  • great advice.

    Just wanted to let you know you spelled Westheimer wrong firefox has a squiggly line under it. It should be spelled Westminster.
  • This was a great post. Will definitely encourage entrepreneurs I meet to read this. I would add that what an entrepreneur thinks is a prototype usually has many more features than is necessary for an initial prototype.
  • Great post. Entrepreneurs definitely need to know more about the venture world when making these types of decisions. I think that since VCs are all anyone ever reads about, they think thats the only option.

    As for Marks comments around sales, I agree, thats what differentiates a hobby from a company; revenue. Think about revenue early and often. Or, if you take a more organic approach, you know you're hobby has become a company once it starts generating money.
  • Excellent. Some "ideas" are simply too small to fail, yet too small for funding - not sure someone would want to get a canned response but I think its good to flush out the details and definitely help others in a similar situation.
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You've found Nate Westheimer's blog. Nate wears many hats. He's the EVP Product & Technology and Co-founder of AnyClip, the Organizer of the NY Tech Meetup, and Advisor to Flybridge Capital Partners. More about Nate can be read on his Bio page and you can follow his thoughts on Twitter

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