New to this and didn't konw exactly where to post.. but have a question

[jeasy02]

I am in the process of starting a business, which after doing extensive research, I will be tapping into an industry that has not been tapped yet. Let me rephrase, it has been tapped, but what I have seen it is no good and I have spoken with people who I would be marketing to and they thought it would be a great idea and eliminate a lot of problems.

What my question is I am looking for an investor who is willing to put up 100% of their money in exchange for equity. Basically the website is going towards the website design, which should not cost that much $$, around $20K or less. I don't have $20K, but I know my idea will work and will be successful, but then again everyone thinks that to. I have a good friend who I will be sitting down seeing if he will invest and if he does then I am wondering how much equity should I give up since he is putting in 100% of the money in the beginning.

Can I have some thoughts please?

Thanks

[chanson]

Have you worked out the business plan and included expected ROI, tiem frame for the ROI, and how many man hours you will have to put in to get it to a certain point? once you know your hours you can put a value on yourself(say $20/hr or whatever) and figure out what your contribution is also. It is only $20k so dont give away to much IMO. Also, if your going to give a chunk away.. is $20k enough? Is it worth it to give up shares for just $20k? Maybe $20k will allow your project to be succesful, but if your going to be out of cash in 60 days then you will be giving more up for another injection!

[jeasy02]

Thanks for the information. As of now this is merely a thought or an idea. I have a development company that I have worked with before and I gave him a very, very high level view of what I want. I gave him a sample website and according to his high-level estimation, he said it would probably be around the $40 - 60K mark for development. Again, that number is based on the website I showed him.

But in terms of having a business plan per sae, no I have not developed yet and that is something I am developing now. Since I don't know the exact price of the website, it could range between $20K - $60K, given the fact that I may scale back a little of what I want in the beginning, but keeping the most important pieces of project in place.

With this particular project I do not forsee a lot of marketing dollars being spent, but rather a lot of word of mouth in the beginning since I have a vast network of individuals whom I have been in contact with for other reasons for many years. But I do see your point in knowing what the numbers are going to be before giving up a valuation. I figure what I would do is explain in high-level my project to my friend and provide some preliminary numbers to spark his interest, as I do have numbers as to what the business would likely be within the first year to five years. We will not talk about equity until the business plan is formulated.

Thanks for the info!

[chanson]

I thnk you have taken the right steps so far, and have a pretty good idea of which direction you need to head. My company does web development also, and if your needing another quote for the project your welcome to pm me and we can discuss it. Good luck!