A lot of money

I am in a bit of a conundrum. I thought of an idea for an app 5 months ago that I believe has the potential to be wildly successful (and profs at Wharton and everyone else I have told the idea to agrees).

I approached a well known developing company about how much it would cost and they put it at the $40 k range to develop. I offered an equity deal and they gave me a 20% discount for 20% equity, which is below what i expected considering how good this idea is. I want them to have some equity because they are a really good team and having them on board would really help down the line, but not for the small discount they offered.

I am going to get price quotes from other developers, do you know of any that I should be aware of?

I am a college student and my father has to pay tuition for me and 5 other kids so times are rough. He could not put in 5k let alone 40k. I can probably borrow the money from my uncles and some wealthy friends to, but I am taking a huge risk. If this fails I am 40 k in debt (how long would it take to work that off as a banker) ?

How would you play it? If you were in my position, how would you go about it ?

I have no credit history so I cannot borrow the money either.

 

Use the web to find "angels" and put together a good presentation that you can pitch if they decide to hear you out.

You give me a gift? *BAM* Thank you note! You invite me somewhere? *POW* RSVP! You do me a favor? *WHAM* Favor returned! Do not test my politeness.
 

But I am not a developer, I do not have the app made, only the idea for the app and I've drawn it out shown how it works etc, but I cannot develop it. I've been warned not to approach VCs unless you are a developer cause they can screw you over.

Will do though.

 
NOMNOMNOMNOM:
So you want to work in investment banking, but you can't even come up with a basic projection of your own personal budget in excel?

Don't know what you are trying to say here or how it is remotely relevant (I am looking to raise money, not make a budget), nor do I care. And I do not want to work in banking.

 

It's very difficult to convince angels of just an idea these days. I think between your friends, you should be able to find a decent programmer who can put together the iPhone app (objective c and using the apple app making software is quite simple). You should also be able to find a good graphic design student who will be able to help you for very cheap. Get the basic iPhone app out and if it is well received, you'll have much more success getting seed money to build it professionally on other platforms and market it etc.

-MBP
 
manbearpig:
It's very difficult to convince angels of just an idea these days. I think between your friends, you should be able to find a decent programmer who can put together the iPhone app (objective c and using the apple app making software is quite simple). You should also be able to find a good graphic design student who will be able to help you for very cheap. Get the basic iPhone app out and if it is well received, you'll have much more success getting seed money to build it professionally on other platforms and market it etc.

I've got a friend working on it already. I think he is really smart and should be able to make a very basic version of the app (the app is uber complex), but the issue comes in when you scale it up the infrastructure falls apart and it would take two months to get it done professionally, so it is a gamble going that route first.

 

To find a better quote have you tried finding freelancers and have them do it? Try Guru.com or Elance.com (they are websites that connect freelancers to projects) to get freelancer. I have used Guru in the past and can attest to good service, have not used elance but I heard it is also good.

 

I'd go with the equity deal. The more people you talk to, the more likely someone is to steal your idea.

Men are so simple and so much inclined to obey immediate needs that a deceiver will never lack victims for his deceptions. -Niccolo Machiavelli
 

Monyet,

If the idea is as solid as you think (and I have no reason to suspect otherwise), borrow the money from whomever you have to (uncles, loan sharks, the fucking King of Siam, it doesn't matter) and get the product to market before someone else does.

Ultimately, if you fail, 40k is not that hard to pay back. And if it's wildly successful, you'll be sorry you ever waited. Also, I'd be really hesitant about giving up 20% equity for an $8,000 break in the development costs. I'd find a way to cough up the $40,000 and keep 100% of the company. Don't even offer equity to family members, just an attractive interest rate.

 

40k is really hard to pay back when you're a broke college student.

Men are so simple and so much inclined to obey immediate needs that a deceiver will never lack victims for his deceptions. -Niccolo Machiavelli
 

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