Starting a Company

**pcbres16** · 01-03-2011 06:05 PM

I am diligently working towards starting a mobile application company. The one place where I am lost in is funding... I know I will need to hire a Designer and possibly a Developer. These obviously don't come cheap. So I am wondering two things
1). Is it better to fund a business through personal savings, or take out a Business Loan from a bank?
*NOTE* I just recently have a credit score from my first payment on my student loan. I do not own any credit cards or have any debt besides student loans(which right now total about 7k).

2). In stead of paying a developer say $2,000 would it be wiser to give them a profit sharing option to pay them, so that I don't have to take out a massive loan just to pay my employees?

**PleasureBuilder** · 01-03-2011 06:45 PM

The best way is to use your own money. No risk no reward. If you can find a designer or developer its probably a good idea to give them a % of the business since you will need someone to handle all the technical end of the business.

**AndyMc** · 01-03-2011 08:18 PM

Agreed with the above.
Putting in some of your own money seems to have that extra motivating factor.
But since you are in a tight spot, it makes sense to do some profit sharing for your developer. This also hopefully locks them into a logn term commitment

**Keith.S** · 01-04-2011 11:06 PM

Another Idea that you can provide Profit sharing to another party. If you have friends that they have money, you sell them Idea and get funds from them to pay employee. This is just the same way as you're finding investor.

Regards,