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Venture Capital, Startups and Corona / Crisis

Discussion in 'BlackHat Lounge' started by Holdentot_Accfarm, Mar 25, 2020.

  1. Holdentot_Accfarm

    Holdentot_Accfarm Registered Member Marketplace seller

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    Hello dear community,

    Me and my team have own projects that meant to raise venture capital. We started them back in 2019 when the world was more stable and safer place. Now everything is changing and investments are cut.

    How do you think, a project that is related to a content consumption (like subscriptions of video streaming, games, etc) does it have a chance to raise funds from venture capitalists?

    Or zero chance for 2020?
     
  2. MisterXYZ

    MisterXYZ Jr. VIP Jr. VIP

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  3. Holdentot_Accfarm

    Holdentot_Accfarm Registered Member Marketplace seller

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    Awesome. Thank you for sharing.
    In your opinion, does a startup related to Game/Movie streaming with MVP only and no sales have a chance for fundraising today?
     
  4. kinglion

    kinglion Jr. VIP Jr. VIP

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    If you have a profitable business it shouldn't be an issue.
    I talked with my bank and VCs, they told me they see Startups as an "Alternative Investment Method".

    It is all about you being able to be profitable
     
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  5. GringoMonkey

    GringoMonkey Elite Member

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    VC's tend not to invest in startups unless you have seriously disruptive or proprietary tech.

    So typically you would be looking for angel investment to enable proof of concept.

    When I did that in the past the main questions they wanted to know were:

    Do you have anything you can show them / your track record in this space?
    Do you own the ip?
    How are you going to monetise?

    Unless you can give them pretty solid answers, then they probably wont invest.
     
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  6. Holdentot_Accfarm

    Holdentot_Accfarm Registered Member Marketplace seller

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    Thank you for you reply.
    What is your guess on the nowadays situation and venture / angel investments?
    Is the startup industry dead for 2020 or doest it have a chance?
     
  7. GringoMonkey

    GringoMonkey Elite Member

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    Of course investors invest now. But I think your real question is will they invest in you?

    In my case the wheel has gone a full circle and among other things, I am an angel investor now.

    Based on this sentence: "startup related to Game/Movie streaming with MVP" I would not invest and I don't think they will.
     
  8. Elvlin

    Elvlin Jr. VIP Jr. VIP

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    Well if you can present yourself as low risk as possible, maybe you have some hope. Investor will find more stable investment now. as most is in wait and see attitude.
     
  9. LordWeb

    LordWeb Newbie

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    everyone that is with a right mind for investments right now can get a native ad that is showing your advantages over others.
    Think about it ;)
     
  10. Jack Jericho

    Jack Jericho Registered Member

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    It really depends.

    Ofc, the current situation causes people to have negative outlooks on economies all around the world.

    However, people in such times usually lose their faith in the traditional ways of investing (e.g. gov't bonds).

    VCs in general don't like having their money laying around and more and more small investors (private and angels alike) will appear a market creating a competition for startup with 'cockroach' traits. Early cash-flow generation, recession-proof industry, etc. You seem to hint that you are considered in the latter due to more people spending more time on their screens increasing the demand for content.

    What ticket size are you looking for, from what country, and why do you need that much money?
     
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  11. Makemeproguys

    Makemeproguys Senior Member

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    Are you an ivy leaguer or from some top college?
     
  12. Jack Jericho

    Jack Jericho Registered Member

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    I have been actively investing for 9 years now and am currently building 4 startups. I ain't some ivy leaguer, I am a practitioner coming from working class. ^^
     
  13. NEWinfo3348

    NEWinfo3348 Newbie

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    Angels are the best bet, VCs are too picky in terms of proof of revenue and positive projections. What about crowdfunding? Not gofundme, but others geared more towards start-ups.
     
  14. Jack Jericho

    Jack Jericho Registered Member

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    Private investors, business angels and venture capitalists have their pros and cons, you can't simply declare one of them is the best bet. It all depends on context and possibilities. Professional institutional VCs are interested in great teams and products (IPs even) rather than projections.

    Capital crowdfunding is not that popular due to lack of sound legislation. Both the US and the EU had their relevant frameworks updated at the end of last year.
     
  15. Stable Genius

    Stable Genius Junior Member

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    This is an area where I have some knowledge and want to share it with OP & others.

    There are different types & levels of investments into startups. Depending on size of investment it can be angel investor, VC, etc. If you're a new company that is not profitable most large investors wouldn't be interested in talking to you. I think new startups should raise funds from friends & family first and followed by angel investors / VC. In 2020 you need a lot more than working proof of concept to impress someone and in my opinion you need to have startup have a working proof of concept after 1st round. $0-$50k friends & family, $50k-$500k angel investors, $500k-$2m VC, $2m+ VC & other investment types that can invest serious coin. Most large investors dont mess with under $2m because the amount of due diligence to do this deal & smaller investments is the same or very close & around $2m is usually the breaking point where they're OK.

    As far as your startup content type it all comes down to your exact niche & subscription model. If you will have proven record of subscribers & show continued growth this will entice investors above $500k to talk to you. Without subscribers you will be just another video games streaming startup.

    As far as timing everyone is keeping a low profile right now for an undetermined amount of time. Once things settle down institutional investors that are keeping low profile now will be interested in getting some investments. While they will be hungry for deals they will also be super careful with everything because economy would not be in best of shapes.

    You best bet is to continue working on your startup, improve it and get sales going and wait out the storm. Once you're profitable you can start approaching investors.
     
  16. steroidjoe

    steroidjoe Regular Member

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    No, don't waste time on stuff that has already been done, twitch, etc.
    They seek innovation and at least 8 figure valuations ideally.

    I'm going there.
     
  17. Holdentot_Accfarm

    Holdentot_Accfarm Registered Member Marketplace seller

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    Thank you for reply.
    Could you please explain on your opinion. Why neither you nor them would not see it as a good idea for investment?

    Thank you in advance.
     
  18. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    Do you have a 3 - 5 year proforma?
    Do you have a business plan?
    Do you have an executive summary?

    That is the starting point to attract money from someone to invest in your business, if you actually have a business and not just an idea.
     
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  19. Holdentot_Accfarm

    Holdentot_Accfarm Registered Member Marketplace seller

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    Thank you for such an extensive answer.
    We have a presentation, team and design/concept with very basic features.
    Today we are looking for $200K investment
    From UK or USA
    These funds we need to develop the MVP, build marketing and start monetization.
    We expect that it will take us 6 months to develop MVP & marketing. Then we start the monetization.
    So far we have build 3 successful businesses that we have been operating for 2 years.
    All guys are from the enterprise IT sector. So, I believe we have the expertise. However, we lack knowledge in venture capital and especially we are a bit confused in today situation.
     
  20. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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