Discuss // Raising money for advertisement. Selling shares vs. getting a partner?
Raising money for advertisement. Selling shares vs. getting a partner?
We have a finished product LineBuzzer.com we need to raise money
for advertisement. None of existing
cofounders having an advertising experience. What is the best solution, sell
company shares (this is a startup) and hire an agency or find a partner with advertising
skills and budget?
Alex, as a seasoned internet marketer with over 16+yrs experience and a client roster that includes Fortune 500 companies, I can tell you my thoughts on your post. I have a service company called Zenergy Works and we do top notch SEO and Web Design. I also have my own business incubator and venture builder in Zenergy Ventures. I first got approached from a client back in 2007 that wanted to give me equity in his company in exchange for my skill set. We settled on a fair deal and so we begun. I gave him what would now be equivalent to $100K+ in services in an 18 month period. Didn't receive any cash flow or compensation for my time and understood we were going for a big cash event. Well...3 years later. Nothing. Great SEO and Incredible Marketing never fixes a bad business owner or bad employees. ----- Now, a newer scenario. A friend reaches out and ask if I would be interested in joining him in developing a product and doing all the marketing. Having learned from my mistakes, we decided on a 50/50 deal and we put equal cash into the transaction. We split duties accordingly and within months had a success that is now cash flowing. Everyone is happy and we are on track to be the best "Tactical Dad Diaper Bag" in the US. (Google it!) -----My point. Equity is expensive if you can get by in the short term and start generating cash. But...Hiring an expensive marketing firm and spending raised capital also has its pro's and con's. If I was a Software Engineer and Product Specialist, I would look through my network on friends and find someone you can partner with who shares the passion for what you have. NOTHING beats passion and skin in the game.
Have you considered looking for a mentor first? Someone you can grab a beer/coffee with to brainstorm? I'd recommend that you create an output/input plan for how much you'll anticipate you'll return off of any investment you make. There are certain fixed costs that are unavoidable (like if you're doing ppc you'll need a good landing page software) but how much you invest in your advertising is completely up to you. Where do you live? Are there any local ad agencies you could ask out on a mentor date?
We're an expanding start-up company based in New York City. We have a team of experienced developers who covers complete development and project management, the only one project puzzle piece is missing, advertisement.
We would like to raise money to get professional services or get a partner who has an experience and money to invest in exchange for equity.
Independent Venture Capital & Private Equity Professional
Sell shares. Do not borrow money. Partners are fickle and unpredictable. Use share sales to hire a good outside agency and use a part-time consultant to supervise the agency's work. Manage advertising budget carefully. Evaluate effectiveness of advertising bloodlessly. Study and use guerrilla marketing and social media. Don't be misled by early adopters. Look for repeat customers.
Sent from my iPhone
There is no one answer or course of action that will work for every objective and project. Sid is the Director of Business Development and Marketing for SidtheSecurityPro.com and ClasidConsultantsPublishing.comm
I think you have a very interesting service pain reliever solution Alex. I am not an advertising whiz but I would like to throw in some first timer web visit perspective into the mix if you don't mind.
I get that it does the auto line call buzzer like thing but I find that I get to a bothersome hurdle because I don't understand exactly how it works. Does the restaurant need a browser open, is it downloaded software, is it up in the cloud, what does a hostess need to do to operate it? Does it work on an Ipad register? Will it tell me the customer how much time I have left or what number in line I now am? Also do I have to give them my phone number? Do I need a QR reader 3rd party app on my phone, etc...
I did notice that you have a white board explainer video. We have found in the case of products or services where humans are part of it that it is best to go with a video that shows people actually using the device in some sort of story based outline. Maybe showing how two different couples handle the waiting experience, one couple without line buzzer vs the couple with line buzzer. While also showing exactly how the thing works in real life.
Some things to think about (if you haven't already) adding in a line number feature, also maybe give them a trivia game that they can answer for fun and coupons while they are waiting. Or give them a coupon if they instagram the place with a Line Buzz hashtag on your pic,etc.
But I would say the first order of business is to know that your potential customer completely has a grasp on how the thing works before they call you.
Of course our Venture Capital guy would say don't use debt service to build your company, use other peoples monies. Yes. Effective if you think the product is not going to work and you have no buying power. I've built 18 companies over the last 3 years, some with investor money only, some with a bank money only, some with hybrid's of the aforementioned. EQUITY IS EXPENSIVE if you think you have a break out product or service. Bank Money is expensive if you have HUGE risk. And yes, they take your house, car, boat, wedding rings..everything. Bottom line. Test your product in 3 major DMA's (Designated Market Areas First) with seed money only. Bootstrap and go with out to earn a reputation in the space. If you go for money, do it later in the business model. You can grab more dollars for less equity. FYI - Our Dimitrios may not understand QR Code technology, but yes. The market is not as warm to QR codes as it was in 2013. You do have a learning curb of people downloading the app prior to entering the restaurant or bar. I would say that finding an affinity partner to CROSS sell products will be much easier.
Having a partner with money for advertising may not bring you a clients, it may bring you an issues. I would recommend with all of your co-founders and partner to explore the local market wherever you are. Knock on every door, give your service for FREE for a month. Let your clients do FREE advertising for you. The best way to grow is organic. If your product is good and clients see the value and profit, they will call you.
So Jivko just recommended a combination of Demo Marketing, Affinity Marketing, Guerilla Marketing, and Direct Sales Channel growth. Cool. And sure those are viable. They wont launch a program nationwide unless you have insane traction that is viral. (The Unicorn of Products. Less than .001 of businesses will ever have that kind of early traction.)
Jan 26, 2016
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