I wasn't even good at asking my dad for my allowance, for cripe's sake.
July 13, 2011 8:04 PM   Subscribe

I have the reverse problem of most startups... within two years I built a solid and unique brand, with a high media profile and street cred, proven content and products, and a passionate audience of over 240,000 people and growing. But although people congratulate me daily on my success I'm literally exhausted and starving. People circle me daily wanting to "sponsor" me, but I've found most of them want to make money *off* of me, not pay me and help me grow. Fact is, I'm accepting now that I just can't do it all by myself and I don't even WANT to... but I'm a victim of my own quick success. Without a staff and resources I can't expand, grow and monetize as I *need* to in order to meet the demand.

I don't have any money left though, so I know that without angel investors or funding, I'm sunk. And frustratingly, I don't even know where to start to get funding or attract angel investors... I just don't know what to do (or not to do). It's so out of my element! I'm constantly told that with what I've built I should be able to get angel investors *easily* so I bought a book on it, but I couldn't even get through the thing. I went to art school to avoid math and I've never been good at borrowing, but I need to grow up and learn because this means a lot to me. Soooo... all the advice you can give me (in laymen's terms, please!!!), I'd appreciate.

BTW businessmen *have* tried to acquire me, but even though I need the money I turned it down because they wanted majority share. They were lowballing and it's too early for me to sell, I know it would've broken it and it would've ended up a daily deal site. There's SO much potential and public interest in the ideas I have... it KILLS me that my lack of money cuts me off at the knees because I am so excited about the cool stuff I want to do!!!

I was asking Craig Newmark for advice one day and emailed "I can relate to some of the struggles you had starting craigslist." he responded, "Not sure what you mean, I didn't have struggles." Then I remembered... he had money!!! It was a bit of a wake up call. I'm really doing this the hard way... and I'm tired of it. helllp!
posted by miss lynnster to Work & Money (41 answers total) 23 users marked this as a favorite
Mod note: Please put links in your profile, not here. Thanks.
posted by jessamyn (staff) at 8:09 PM on July 13, 2011 [1 favorite]

What's your exact question?
posted by sweetkid at 8:12 PM on July 13, 2011 [2 favorites]

Are you looking for investors in your business?
posted by BozoBurgerBonanza at 8:15 PM on July 13, 2011

Your profile says L.A. so try starting here and look at incubators. While you're probably way ahead of other businesses being incubated in terms of technology, profile and product offerings, you can probably really use the business advice, the mentoring and the networking.
posted by sardonyx at 8:15 PM on July 13, 2011

Some suggestions:
*Take a small business / entrepreneurship courses at the local community college from a qualified instructor. I learned a TON from my teacher who was awesome.
*Hire a reputable business consultant to help you navigate certain areas.

As a side note, any time you're running a business you need to have enough financial knowledge to know how to make business decisions, and successfully interact with your accounting support team. I mean the 3 limiting factors of any business or department are time, money, and talent. And you need to know enough to balance all three and hire the right people, etc.
posted by Mr. Papagiorgio at 8:16 PM on July 13, 2011 [1 favorite]

Sounds like you need a marketing/business manager? Agreeing that it's hard to tell what the specific question is here.
posted by smirkette at 8:31 PM on July 13, 2011

Not to be snarky, but: you bought a book on attracting investors, but couldn't get through it; you don't like math; and you've never been good at borrowing? Sounds like selling this thing you've created whole-cloth might be the way to go. Or just get an entrepreneur on board as a 50/50 business partner.

What is your end goal with this project/product?
posted by supercres at 8:32 PM on July 13, 2011 [1 favorite]

Response by poster: Sorry Jessamyn. I just figured it was part of the question and people were going to ask to see it. I apologize.

I'm asking about how to go about to get funding. I currently don't even have enough funding to *have* an accounting support team, but I do know how to run a business and hire people. It's mainly that I don't have the funding to make even *that* possible right now. I know I'm sounding retarded... but going after funding is just not something I personally ave *ever* had to do. I need to learn and it's hard for me to admit that I'm scared of making mistakes. It's just really out of my element.

In turn, due to my discomfort I think I worded my call for advice *really* poorly and I'm regretting that. Sigh.
posted by miss lynnster at 8:32 PM on July 13, 2011

Sans money, it sounds like what you need are people who would be willing to give you help, pending compensation at the future financial success of your startup, rather than right away. I'm not sure how that would go about exactly, but there are people out there who would contribute their time and energy, gambling on the future success of a smart start-up. There are others that know better than I, however, how to find those people.
posted by SpacemanStix at 8:37 PM on July 13, 2011

In that case, I guarantee that if there's a product of value in what you have, recent business school graduates (undergrad or MBA) will JUMP at the chance to be your business partner, perhaps for less. Your contribution is an existing product that people like. Their contribution is that this IS their element, and they will handle the VC side.

Obviously, you open yourself up to risk here, but that's to be expected no matter what road to take to expansion. Just be sure to consult with an attorney so they can't initiate a takeover as soon as your partnership agreement is signed.
posted by supercres at 8:38 PM on July 13, 2011 [1 favorite]

You're just a smidge too late for the international startup festival but there are other such events you could attend to meet and talk to people who've coped with similar issues.
posted by zadcat at 8:40 PM on July 13, 2011

Two words: MBA Interns
posted by radioamy at 8:42 PM on July 13, 2011 [1 favorite]

Response by poster: I think my main thing this year has been overcoming insecurity, and fears about success and failure. I think those are the reasons I've had some paralyzing issues with this.

Supercres - I *want* to get through the book, I think I'm just insecure of failure and I hate doing it all on m own. I have a social media site that's got a large cult following and is franchiseable to multiple cities once a larger (and profitable) working business model is in place. I'm being interviewed and on tv and being asked to write articles and books and all sorts of stuff, but even though it's a lot of work, much of the press is considered cross promotional so it doesn't pa (grrr!). I want to build a larger business structure that offers specific products, events and services as well as expand my current content into a larger magazine format with weekly sponsored email newsletters.

Frankly, my end goal as always been to help people and entertain. So far I am helping thousands of people every day... just not myself so much.
posted by miss lynnster at 8:44 PM on July 13, 2011

Response by poster: fyi, my "y" sticks.
posted by miss lynnster at 8:45 PM on July 13, 2011

SCORE sounds like exactly what you need, and the price is right, too.
posted by carrienation at 8:46 PM on July 13, 2011

Response by poster: BTW, two ears ago I went to SCORE and another local place that's similar, right before I went viral. But when I started talking about monetizing Facebook content, more than one counselor asked me what Facebook was and how it worked and said that the didn't see how it had anything to do with my business. So I realized I was working the wrong room and didn't go back.
posted by miss lynnster at 8:49 PM on July 13, 2011

This book might be helpful for you Birthing the Elephant: The Woman's Go-For-It! Guide to Overcoming the Big Challenges of Launching a Business

Look into getting Business Plan Pro Software...The hard work is doing all the research and actually doing the business plan, but its so very very important. Or work with a business partner who will do the work as stated above. It seems like you want to have your cake and eat it too, but I don't think it really works that way.
posted by Mr. Papagiorgio at 8:50 PM on July 13, 2011

How are you at networking? Not networking for funding, partners, or any specific outcome. Just networking for the sake of meeting people with similar interests, questions, or problems. I went to a lean startup circle event here in Chicago and met some interesting people. There's one in the Los Angeles area. That might be a starting point. Also check out conferences for whatever industry you're in.

As for the failure thing, it seems like getting used to screwing up is a characteristic of any entrepreneur.
posted by tenaciousd at 8:50 PM on July 13, 2011

Is it an appropriate project for Kickstarter?
posted by peanut_mcgillicuty at 8:56 PM on July 13, 2011 [2 favorites]

If you ask most business people, "get funding" is going to be the answer they are going to give you.

However, as a veteran of many many start-ups, it's my opinion that this is the WRONG answer. When you get funding - as you have found - it comes with strings attached. Lots and lots of strings. Dance, little puppet, dance!

A better route is to find a way to make your site earn you money. Your site will have to start earning money eventually - whether it's now, to fund you, or later, to repay your investors.

This would be a good time to take a step back and spend a few hours thinking about this question: how to (forgive me) monetize your website.

Premium content?
Awesome t-shirts?

Look at Ravelry. Casey and Jess worked their asses off, and then they built an ad program, curated the ads, and took a percentage of pattern sales. And now Ravelry pays enough to cover their costs, plus those of a few employees.

Look at Metafilter. My understanding is that the entire network (including the salaries of Matt, Jessamyn, pb, cortex, restless_nomad and I think others) is funded largely by inconspicuous AdSense ads on AskMe, which has ridiculously good Google juice. The ads are only visible to people who are not logged in, not to those of us who paid the $5.

Etsy, Threadless, Fark, SomethingAwful... all these sites and more found ways to monetize themselves. Distasteful though it may sound, it's the lesser of three evils. The others being to sell out to investors, or to close up shop because you can't afford to float it on your own anymore.

This is something I've gone through many times myself. Memail me if you want to talk more, or just need a shoulder to cry on!
posted by ErikaB at 9:02 PM on July 13, 2011 [19 favorites]

AngelList is what all the cool kids are doing.

(I'm currently starting a company myself, have started and sold one before, and in between was a relatively active angel investor. Send me something more directly and I can think if any relevant investors.)
posted by joshu at 9:03 PM on July 13, 2011

What's the url to your site? Don't understand why it was removed in the first place.
posted by Foci for Analysis at 9:10 PM on July 13, 2011

>BTW, two ears ago I went to SCORE and another local place that's similar, right before I went viral. But when I started talking about monetizing Facebook content, more than one counselor asked me what Facebook was

Yeah, SCORE can be limited in that respect; I remember talking with a couple of old guys who seemed simultaneously baffled and irritated.

Try breaking things down a bit:

A. Basics

1) What's your model? That is, how do you convert visitors into dollar signs... and what's your second-order plan for getting more $/visitor than you are getting now?

2) What's your plan for getting more visitors... and your second-order plan for finding more sources of visitors?

B. Blind Spots

Contact a nearby business school and, as suggested above, get some MBA interns. (Or, even more minimally, just some consultations.)

You don't need perfect, comprehensive advice; instead, you need lots of different people, with different perspectives and insights, to walk you through your own ideas about A1 and A2.

C. Elves

Figure out the actual dollar value of the things you do on a daily or weekly basis. Produce a specific figure: Task X is worth $8 an hour, Task Y is worth $60 an hour.

Then go to places like odesk.com and mechanicalturk, and find someone else to do what you do. If you're not doing this already, you'll probably be shocked at how much money and time you can save this way.

D. The Vision

Once you optimize your process, spend three or four figures and sit down for a couple of hours with a consultant who has a track record. Work out some numbers, some projections, and a storyline for how you're going to grow faster and faster and faster.

E. The Money

With your storyline in hand, sit down with the suits.
posted by darth_tedious at 9:12 PM on July 13, 2011 [6 favorites]

What's the url to your site? Don't understand why it was removed in the first place.

url for the site is in miss lynnster's profile. Her project is quite well known to Angelenos.
posted by sweetkid at 9:31 PM on July 13, 2011

What's the url to your site? Don't understand why it was removed in the first place.

If you click on her username just under the question, it will take you to her profile here. There is a space for "website" in the profile, and that links to her website.

Typically people aren't allowed to link to their own projects on AskMe, as a way of discouraging unethical spammy behavior. (Not that miss lynnster was spamming, but the general rule was made to discourage spammers and it applies across the board.) Google can't see the profile pages, so that's the approved place to self-link, since it won't encourage spammers who want to boost their site in Google rankings.

posted by LobsterMitten at 9:33 PM on July 13, 2011 [1 favorite]

I'm a fan of the intern idea. If you know how to hire, you can surely find interns. The interns will help you work things through.

Wikipedia throws an annual fundraiser. So does my local radio station. It's another option to consider.
posted by aniola at 9:36 PM on July 13, 2011

Looking at your site, I see no ads. Not even unobtrusive, tastefully done ones. I can totally understand not wanting to muck up your content with that sort of thing, but if you need money, that's the way to do it if you have good page views. Also would recommend having a donate button (didn't see one; if you have one already, make it a bit more prominent) and tiered perks for premium subscribers.
posted by smirkette at 9:55 PM on July 13, 2011 [3 favorites]

It seems like what you need is some mentorship and maybe access to the right people around town. I would point you toward Launchpad LA. It seems tailor made for someone in your situation.

If there is a business model that you have in mind for how this could turn in to something big, pitch it! You have traction with a large audience, that is more than most people in your position have.
posted by milqman at 9:56 PM on July 13, 2011

Ok, so I'm the clueless one here. Anyways, I don't see why you should approach investors without first trying the basic revenue streams that ErikaB mentions.

I would start out with Google AdSense, it's super easy to manage and with your numbers you should get a decent revenue stream going.

Your site seems to offer lots of space and eyeballs to other businesses. There's definitely a possible revenue stream here. Don't feel bad or ashamed of making money of businesses - they sure aren't feeling bad for all the free exposure you are giving them. Businesses have marketing budgets and know the importance of spending money to make money.

There are so many other ways to make money of your site that I could be writing all day long. What you need to do is to figure out what suits your site the best.

Please, please, please don't let your passion die simply because you don't want to monetize your work. And you don't need no stinkin investors - you can pull this off all by yourself.
posted by Foci for Analysis at 10:51 PM on July 13, 2011

A friend went through an MBA program in the S. Cal area and all the students worked on a mktg/biz dev/etc. project for a local business. Maybe talk to the local MBA schools, see if they might could include you/the site in their doings of that nature?
posted by ambient2 at 10:59 PM on July 13, 2011

Do not take on unpaid interns if you are swamped and need help but can't afford to actually hire someone. There are requirements for unpaid internships that basically mean they have to get more out of it than you do, or else they have to be paid at least minimum wage. The fact that it's done routinely doesn't make it not a violation of the wage and hour laws. Just an FYI! The fact that people will take non-paying work in this economy doesn't make it ethical or legal to ask them to do so. Now, if you have a little money and can pay them minimum wage, this doesn't apply.

And I'd echo: Don't be afraid of ads. People who really hate ads already have blockers in place. People who really like a website that they know is ad-supported sometimes even turn their blockers off! Don't be afraid of ways for people to give you money, in general. The fact that you're running something fun doesn't mean you don't deserve to get paid.
posted by gracedissolved at 1:48 AM on July 14, 2011 [5 favorites]

I'm not sure you understand how the internet works. You are talking about investors and small business classes and interns to do work for a site where you appear not to have a revenue model. Luckily, you do not need an MBA to figure this out:

1. Ads. Google Ads or direct placement ads.
2. Membership.
3. Newsletter, ala Daily Candy.
4. Affiliate sales.

If you don't want to run traditional ads for #1, then add a Shop LA directory and solicit businesses to list in it. Regardless of what you do, you must find a way to monetise your traffic.
posted by DarlingBri at 4:27 AM on July 14, 2011 [3 favorites]

Another option is to find someone to sell the concept to.
posted by gjc at 5:33 AM on July 14, 2011

They are going to need a reason to invest. That means you should be able to show them either a revenue stream that exists now, or a possible future one. You have to be able to give them a plan on how this is going to generate money for them in the future. They are going to want to invest if they believe they are going to have a good return on their investment, so you need to be able to give them a good plan on that.

Also, starting to generate income right now with monetizing your site will take some of this stress off you right away. I have a feeling that many of your followers are strongly on FB. I would work on getting them over to the actual site by offering deals/enticement of some sort, then you can advertise, etc. on your site. I would go ahead and use MF as a wonderful example of non intrusive advertising. The loyal readers here actually WANT to support the site by looking at the advertising. It's really a perfect setup to have your followers wanting you to generate money.

You could even offer a mini groupon type of thing to your followers. That would be kind of neat, as smaller, more hidden businesses (even like me...) could participate. So you would be helping local businesses as well (and you can be totally selective) as tempting your followers to your site.

I have loved watching you grow. It's pretty cool. Just read a post from my friend who owns Traxx thanking you, and I love how wonderfully small a world it is.
posted by Vaike at 6:26 AM on July 14, 2011

Two more things:

I want to stress again that you need a PLAN to show your investors. You are having your 15 minutes of fame, but without a plan to back that up, you are not going to be able to use the fame to move you forward.

Also, I started my business with no loan/investment. It was a struggle at first, I had to have a day job for many years. But now I don't owe anyone anything and I LOVE that. If you monetize wisely, you may not need an investor just yet. (You can keep building until it is in every city and then you sell it for a zillion dollars!)

On top of the two things: You might want to think PARTNER instead of investor. Take some of the load off of you.
posted by Vaike at 6:32 AM on July 14, 2011

No ads on your website, and you have no business plan (at least you never once talked about a business plan, and you never mentioned ads in your AskMe). You need both of these.

It would be a lot better for a lot of entrepreneurs if they had just enough income to live on from their startup before they sought investors. It gives them more leverage. Right now, you have no leverage, and you don't even have any numbers in a business plan to justify the amount of money you want from outside investors.
posted by deanc at 7:42 AM on July 14, 2011

If this is your website, you definitely need ads while you figure out a long term funding source.

Other short term cash-flow options:
1. Amazon affiliates. If you recommend anything from Amazon, make sure you are getting a kickback.
2. Merchandise. Signup with Cafepress or something similar to sell t-shirts or whatever for your site.
3. Donations. Add a paypal donation link to your website. Loyal customers/members/readers will often want to help out.
posted by blue_beetle at 8:17 AM on July 14, 2011 [1 favorite]

Forgive me if my preview was too quick, but your site looks similar to forgotten chicago, which on their site they say is similar to Built St. Louis and Forgotten New York. Have you reached out to these guys and seen how they manage? Most of my interaction with the Forgotten Chicago guys is going on tours led by them.
posted by garlic at 10:54 AM on July 14, 2011

I run a hyper-local arts and entertainment website. We've had success running ads from local businesses and venues.

While some of our advertisers came on board after we approached them and made a presentation, the majority of our advertisers contacted us first and asked to take out an ad. But the key to this was that we decided on clearly defined ad spaces on the web page and started running non-profit ads in them, until we had actual paid advertising. Once people realized they could advertise with us, they started contacting us.

Another thing we did (and need to do again soon) is run a reader survey to ascertain the demographics of our audience. The point is to gain information that you can use to sell ads. For example, if you want to run ads for restaurants, you'd ask the question "how many times do you dine out each week?" and hope that a lot of your audience responds with a high number, so you can go to a restaurant owner and say something like "75% of our readers dine out six or more times a week."

It also might be worth it to offer free (or discounted) ads to a prestigious advertiser, just to get the ball rolling.

Hope this helps.
posted by chocolatepeanutbuttercup at 11:58 AM on July 14, 2011 [1 favorite]

My company met its group of investors through a co-working space. The founder worked out of the space for a couple of years, and the community was really strong. (It was Indy Hall in Philly, FWIW.)

Without the Indy Hall connections, it would have been much more difficult to meet the right people. Even if it's not a co-working space, there must be a community of entrepreneurs in LA. Hang out with them!
posted by nosila at 1:24 PM on July 14, 2011

I was about to suggest the two points Smirkette made: Ads and a Donate button.

If you allow signups, turn off ads for signed in users.
posted by Deathalicious at 8:18 AM on July 28, 2011

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