The subject says it all. I'm in the St. Louis, MO area.

If you guys have any positive comments, I'd be happy to hear from you.

search for yourself...i doubt you will find them browsing a web hosting forum! lol

Originally posted by dustin[s31]
If you guys have any positive comments, I'd be happy to hear from you.

If you didn't act like your 13, you would have known that I asked for POSITIVE comments.

And I'm not looking for them on this forum. I'm asking other web hosts where they might have found them.

Re: Investors? Where can I find them?

A freind was doing some gardening the other day, he came to a large stone that had not been moved for a while, on lifting the stone to the side he saw a couple of beetles, some worms, and an investor, apparently still alive. I could ask him to send the investor over to you if you like, for a small charge :)

hope this helps.

urm...im 17! but ill give u brownie points for getting near!:D

Originally posted by digitalb
urm...im 17! but ill give u brownie points for getting near!:D

Then type like it.

First, start with a killer business plan. Make sure it is well written and has goals set up. When you find potential investors give them your business plan and let it go from there.

OK...will twepe lasike iet!

LOL

Originally posted by greengunboat
When you find potential investors give them your business plan and let it go from there.

I have a business plan. It's the finding investors part that I need help with. ;)

As much as I hate them, try having a browse in some the the venture capitalists sites of your country, you can often pick up valuable knowledge from these places.

Oh, ok. Just wanted to make sure you had one first.

I heard this is a good book: "High Tech Start Up"

What amount of money are you trying to raise?

What are you offering in return for investment -- equity, debt, what?

Looking for active or passive investors?

What time period is the investment for -- what "exit point(s)" will investors have?

What type of return would you project they will receive for investing for "X" period of time?

What stage is your company at -- seed, small, med, large?

How long (if you are not a startup) have you been in the hosting business?

How do you plan to use the money you raise?

Thanks,

Louis

FWIW, I've read the book "High Tech Start Ups".

It's not for hosting companies. It's for companies who are doing business on a fairly large scale and aiming for an big IPO. Mostly geared to engineering oriented manufacturing companies rather than hosting providers.

Not the typical path followed by a hosting company.

stlouislouis,

I've PM'ed you.

This is a good topic.

FWIW, I'll share some thoughts that may be helpful to others here.

For most folks interested in either starting or growing a hosting company, I think they are better off to forget about external investors. Instead, just get started at whatever level you can self fund your operations. Even if it's the lowest cost reseller account you can find.

For those who decide to seek investors, keep in mind investors invest with the idea of a return. That means ALL their money back and then some -- either in the form of a fully repaid loan with interest paid on time as agreed, or from the sale of the equity in your business that you had to give up to get their money.

When it comes to equity, never kid yourself. Anyone who owns less than 51% of a company is a glorified employee. Things may go fine for a long while...but some day.....

Often, getting external funding means doing things at a large enough scale to throw off enough dollars in profits to make the risk investment worthwhile. People with money usually don't want to put in much time or energy on small amounts of money a small scale operation would require; at least not without taking a very large percentage of the equity in return -- then it's not worth *your* while.

One problem with doing things at a larger scale is that mistakes cost more -- maybe even enough to kill the company, whereas a smaller company could have survived the mistake.

It's a lot harder to start small and build up out of profits, but you end up better off down the road, IMO. You've made mistakes when they didn't cost you much....and you own 100% of the company.

A good source of info is the Small Business Administration (ask about an organization called SCORE). You will find many references to other good sources of information from the SBA, such as organizations that help small ventures in your local area.

Keep in mind there are a lot of people and companies that prey on people wanting to start businesses. Selling all kinds of products and services to "help you". IMO, most are to be avoided. This includes lawyers and accountants who want to sell you a level of service more fitting for an established, more mature company.

You need to be legal and keep the books, yes. I'm not saying you shouldn't consult a lawyer or accountant. But for instance, IMO, a hosting start up doesn't need to pay an accountant to "design" an accountant system for them -- nor tell you how to run your business while charging you for their "advice". Just because an accountant knows how to keep the books doesn't mean they are a business guru.

Instead, learn what you need to know as you go, do everything properly regarding the law and taxes, and just go forward.

A good book for budding host is "Starting on a Shoestring".


Hope the above helped,

Louis

well said, stlouis...

Our first investors were our personal credit cards. That got us off the ground and proved we could manage a small business. Once we had something of a track record, then it was time to really grow... which required investors. First place to look is friends and family. :)

Next tactic is local entrepreneurial networks... chambers of commerce, SCORE, SBA, and even bank loans if your numbers warrant and/or you have personal collateral.

I don't mean to offend anyone, but credit cards are the
nastiest piece of plastic ever invented.
Especially if you are starting out and experimenting they
can take you to bankrupcy in no time. The interests on them
will make you having nightmares every night.

Angels investor are bad as well. If you fail, you
burned-up all the people's money as well as
probably your relationship with them.

Loans are also bad but not as near as credit cards or ang. inv.
They are kind of ok if you really know what your are
doing. The interest is low but you still need to know
how to make money and be almost sure you will make them back.

The best way of doing business is to use Venture Capitalists
with large amount of capital available, like sequoia and part.,
garage.com, goldman sachs etc. The cool thing
about this method is that also if you fail,
nothing happens to you. They will also help
you run the business if you want, providing you
with the qualified personnel as you need it.

Some people say to always keep 100% or at least 51% of your company.
This is a really immature statement.
When you get financing from one of those VC, you are
talking about few million dollars.

Now:
would you like to own 25% of a company that is starting
with 5 million dollars and 30 hand-picked veteran employees or 100% of a company that
resells mchost accounts at $3/month and you are the one man band?
Bill Gates owns I believe 16% of microsoft. It is not
a gold employee, it is the richest man in the world.

Starting small is a pain in the neck, doesn't offer you any
competitive advange over anyone, and it will take you years
to arrive eventually to make your first million. Most Likely you will never make it.
90% of small businesses fails in the first 5 years.

this is because many business get finincing with CC, or angel investors
or loans, this is why. Add the inexperience of yourself that
tries to be an accountant, sales person, technician, and more,
this is the reason why. If you are starting a pizza place i would
say get a loan, but not if you are dealing with a certain level
of business sophistication.

The answer to your post:

Dress up, make phone calls and ask to meet with one of
the people in charge of financing. Show up with your
business plan and possibly the staff you want to hire.
More credentials you and your future employees have,
better changes you have to get financed.
Ideally these people would have worked on a web hosting
company already and made it big and successful.
If you show up with your girlfriend that was in the
make-up business and now she will be the VP
of sales for this web hosting company, is not going to help.
After they like you and your idea, your will be eventually a rich man.
Keep in mind that there is a 90:1 ration of business plans acceptance,
so do your homework well.

good luck