Hi HN. I find myself in a curious and frustrating situation. I figured that asking HN might produce some answers that would be helpful to me and others in my position.
Specifically, I like to know if anyone know of funding sources for what I feel is a guaranteed (I have made money for about a decade for doing something similar) start-up, but the revenues, although decent, will be comparativly mild. The details of the startup are less relevant than the problem that it presents, which is:
1) The product is very niche. You basically have to be in the industry to understand why it is needed.
2) There is practically no competition. This is due to the industry being historically "non-technical" and that, although it is has been around a while, it has only recently (last 4-5 years) experienced major growth. This has the effect of making advertising a little tricky.
3) There are perhaps 50,000 or less people in this industry. Of those, about 1/4 or less would be potential customers of my product. So if I had an amazing 50% penetration rate of my target audience, I would cap out at about 5,000 or less customers. More likely 500 to 1000 customers.
4) The typical customer will have money to spend, but due to the entire industry having a built-in cap of its own, I would expect only about $200,000 - $500,000 revenues a year with 0% chance of someone wanting to buy it out for $10 million, for example.
So, in short an extremely niche startup with little to no competition, but a built in revenue ceiling.
The reasons for funding is:
1) Although I have a MVP, it needs conversion to an multiuser web app vs. a standalone single user web application. I estimate this would take 3 - 6 months (too long for me to live on my meager savings)
2) Needs graphic design work throughout. This will be essential, as this is a b2b app and needs to make customers feel comfortable trying it out.
3) Again, because it is a b2b, I would not like to offer this to customers without knowing for sure that even in a worst case senerio, I would be able to make sure they all safely have their data back.
So HN, this doesn't seem to be a good candidate for kickstarter, venture funding outfits usually look for something a little more top end potential, and loan from friends, family, or bank is out of the question.
Specifically, I like to know if anyone know of funding sources for what I feel is a guaranteed (I have made money for about a decade for doing something similar) start-up, but the revenues, although decent, will be comparativly mild. The details of the startup are less relevant than the problem that it presents, which is:
1) The product is very niche. You basically have to be in the industry to understand why it is needed.
2) There is practically no competition. This is due to the industry being historically "non-technical" and that, although it is has been around a while, it has only recently (last 4-5 years) experienced major growth. This has the effect of making advertising a little tricky.
3) There are perhaps 50,000 or less people in this industry. Of those, about 1/4 or less would be potential customers of my product. So if I had an amazing 50% penetration rate of my target audience, I would cap out at about 5,000 or less customers. More likely 500 to 1000 customers.
4) The typical customer will have money to spend, but due to the entire industry having a built-in cap of its own, I would expect only about $200,000 - $500,000 revenues a year with 0% chance of someone wanting to buy it out for $10 million, for example.
So, in short an extremely niche startup with little to no competition, but a built in revenue ceiling.
The reasons for funding is:
1) Although I have a MVP, it needs conversion to an multiuser web app vs. a standalone single user web application. I estimate this would take 3 - 6 months (too long for me to live on my meager savings)
2) Needs graphic design work throughout. This will be essential, as this is a b2b app and needs to make customers feel comfortable trying it out.
3) Again, because it is a b2b, I would not like to offer this to customers without knowing for sure that even in a worst case senerio, I would be able to make sure they all safely have their data back.
So HN, this doesn't seem to be a good candidate for kickstarter, venture funding outfits usually look for something a little more top end potential, and loan from friends, family, or bank is out of the question.
Any ideas?