What's the best move? Seek a partner, crowdfund or self-funding?
Here's the situation. I have a small business, to grow my business I want to develop software to build my portfolio, it's part of my business plan. I'm no programmer, and programming is not cheap. I've hired through elance and guru.com, but have not had a complete working software yet that I can sell. I'm sure my fellow entrepreneurs have struggled here too. What's the best way to 'fund' development? Do I partner with a programmer who will hopefully trade equity/ownership? Do I keep at what I'm doing and when I make enough money, hire a per-incident developer? or do I seek out crowdfunding options? What's your experience in building software to grow or become your business?
Hi Christian, what you should do is to go to tech/startup networking events in larger cities of your country and look for someone who is interested in becoming a partner. Use Meetup.com, Eventbrite or Facebook groups to find the right circles.
Alternatively, you can go to Saigon, Vietnam or Jakarta, Indonesia for a few weeks and look for a good, trustworthy developer. Connect with the global independent location movement to get an easier leg in (Facebook Groups, just look for digital nomad groups).
If you're seriously considering crowdfunding, be prepared to invest a substantial amount in the campaign, it's not that easy! Have a look at this link to help you understand what needs to happen at every stage of your startup development to reach your goal: https://www.brainhive.de/en/startup-phases-what-each-stage-is-about/
Regards & much success for your project!
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Hi Christian, Here is an option. I am based in India and have more than 20 years of Software development and management experience. I have a small startup and have around 10 very good java and android developers. I have been inviting people to join me and in your case i can offer few developers to work with you on your ideas. We can enter into an agreement to share profits once your product is launched in the market.
I will be happy to take this ahead.
I want to pause and thank everyone for their thoughtful insight and opinion.
I have decided that Croudfunding is OUT - my business model doesn't include consumer products with mass public appeal - wrong decision for me to attempt.
Partnerships - difficult, and I'd have to share equity.
Investors - I'm pre-investment, I'm not going to attract investors at this early stage.
It seems that I'm growing correctly, slow and steady. I'll continue to outsource work and pay as I go, until I have the right product, at the right price and the right time. In the meantime I will find someone willing to charge a low but fair "wage"/rate for the piecework in the immediate, and accept royalties after the product goes to market, as a bonus to their work.
Contract, contract, contract. Partner with a programmer AFTER you have a contract drawn up. You both can modify this contract prior to actual work beginning to ensure everyone involved is happy with the results. Also, this will alleviate any later issues with ownership. If this software is to be used for your business only - then by all means you should get ownership to it after it's developed. However, the programmer should get a percentage of the profits gleaned from the software he helped develop. (i.e., 15% for 5 years) or something like that. If the software is potentially sellable to other businesses then there needs to be a contract drawn up with both of you earning profit from its sale. But no matter the use - ALWAYS do it in writing. - GOOD LUCK!!
If the cost of developing a software is low, than it is not advisable to partner with an programmer. You can rather choose to fund it yourself.It depends on the kind of software, you are developing. If it empowers a user in various ways, I would suggest you to go for crowd funding. It will give you pre-sales, promotion, popularity and branding as well.
If the investment is high and the idea has a great future, I would recommend you to go for crowd funding. Most of the entrepreneurs make some mistakes while approaching for crowd funding. They don’t choose the niche specific crowdfunding websites, they don’t give proper rewards and they don’t present their ideas properly.
You may be qualified to work with a CDE to get a working capital loan through the CDFI Fund or some other socially conscious source. It is always better to borrow or self fund unless having a contributing partner is part of your business model. I own a small CDE and help companies like yours. Please visit my Tumblr page and ask me anything. sproutcde.com
Great question and sounds like you are keeping things moivng forward. I have build three small businesses (all inner related) and money is always a challenge.What has worked well for me is forming mutually beneficial partnerships.
I have found LinkedIn a good place to start. Reachout, connect, simply state you believe there may be some business synergies, and request a quick call to discuss.
As a quick read it looks like you're asking the wrong question/s. If you need programming services - it's like hiring a tradesman - you need to find a qualified entities (persons or companies) and get a bid. If funding the bid is the problem that's the question you should be asking. A partnership is an entirely different question but could be a part of the answer to the funding question but with an entirely different set of parameters. partnerships are like getting married! I've designed and developed many software programs/applications let me know if you'd like a sounding board on your thoughts. It's a lot less expensive than you might expect in today's global sourcing environment.