Now or Later???

[nookyt2]

I'm starting a website I feel will really bring in the youtube and myspace type of numbers , it should be complete in about another week or so. I'm funding it with my own funds and it hasn't got unbearable yet. What advice could you give me on when to start looking for capital? Is there a magic number of how much traffic you should be getting a day that is good, or how many members have signed up for your site . Thanks in advance for everyones replies.

[ideas2earn]

lol.
lol.
lol.
When you have so many visitors that you are getting profiled on CNN International you will have no trouble finding investors.

Seriously you need to have a plan as to how you are going to monetarise the site, a proven user base, proven ad revenues and advertiser endorsements. If you don't understand any of this stuff then I suggest you do a bunch of reading and of course we will all be willing to help with more specific questions.

I met someone a couple of weeks ago who wanted a million dollars for a maximum 49% in her website. The business model was pretty sound, whe had 30,000 signe dup members and a clear plan for how to get more, she had 5 full time staff including herself and she wanted the money to expand internationally. This may sound like a lot of information but what she did not know was what the $1m investment would be worth in 3 years time (i.e. no sales projections), when she would make a profit, where to go first internationally, why to go international, or what her international strategy was. In short she wanted a million bucks but wasn't offering anything....would you invest your money in that?

Start to think as if it was your money that was being invested, and what you would want to see before you took a chance. Investors in internet sites don't expect guarantees but they do expect some chance of making a gain on their investment and if they can't see where that is coming from you won't see a dime.

[nookyt2]

I have thought about that actually after ready entrepreneur magazine. I feel I have enough information and once the site is up , that a business plan for a free user website can be written and show profit. Thanks for your advice.

[ltressel]

Nooky,

Unfortunately, most websites particularly with the flair of social networking/video sharing always got their funding through other companies that buy them out or buy a portion of their company sometimes it will come from private investors.

Good story to look into is the myyearbook.com. Three siblings put this site together, two of which are still teenagers. The seed money came from big brother. The things is though as the site grew, they needed more and more servers to accommodate traffic etc. That's the where the money starts becoming an issue for the little guy.

Point is- to attract the financial backing, you do have to come up with something really fresh and financially tempting to investors. Then you got yourself a good recipe.

Ciao,

LT

[jasaunders]

Why do you need the additional capital? What would you do with it.

I suggest you read the feature article in Inc. Magazine this month. Great case study on the rise and fall of facebook.com and how too much VC can be a bad thing.

[nookyt2]

Thanks for the advice, I will read that feature article in Inc magazine. If I did have additional capaital , well now that I think about additional capital is not what I need at this moment, first I would like to launch the site and go from there. The big thing is I will give away weekly prizes.