how to raise $20,000 so I got a great
question for one of my YouTube viewers
love you guys johnathan who wrote in to
say excellent advice Evan I’m on the
expansion capital train right now got a
product of customers but I’m struggling
the scale because our software needs an
algorithm update any advice in that
front wouldn’t take more than $20,000
great question Jonathan and honestly you
don’t have a lot of options the reason
is because you’re not really on the
expansion capital train expansion
capital is when you are improving your
concept and now you need marketing
dollars to help you grow right so you’ve
tackled this one market and now you’re
ready to grow to another market and you
need to hire a salesperson or you need
more marketing dollars to help you
expand that’s expansion capital what you
need is R&D money you got to put money
back into product development and
investors hate funding that that’s the
worst kind of funding to go and ask for
help me make my product nobody wants to
invest into that and so at the amount
that you’re looking for 20k
you’re not going to get it from a
venture capital this is way too small in
angel investor usually looking at a 50
thousand dollar limit so you’re beyond
you’re you’re too small for that you’re
really looking at your personal savings
you know visa maybe bank loan on a
personal guarantee the government grants
and loans but there’s a huge cycle you
have to wait to get it honestly your
best bet is to grace’ from your
customers right if this feature was so
valuable and so helpful and your
customers are asking for you either use
the capsule that you’re getting from
your business or if somebody really
really really really has to have it then
you have them pay for your development
this is something that I did over and
over again with my first software
company it was biotech software and it
was started by these two founders and I
joined as an owner and they they were
the programmer so they put all in all
their time to create the product and any
new features it would have to do
themselves but when we got a new feature
request if it was widespread enough that
we felt like everybody could benefit
from this
we used the cash flow that we have from
our business to
support and say okay here’s what we’re
going to go and create but if somebody
really really really really wanted a
feature you know we had one customer who
needed to have it translated to Spanish
like I had to be in Spanish like that’s
not our market yet we’re not ready to go
there we have to have it in Spanish so
we charged them for and they paid for
our development cost okay we can make it
for you in Spanish we can add this
feature in but it’s going to cost X
amount dollars more and they made a
decision and a lot of the times people
said okay I’m okay with that
and we weren’t making a huge margin
offer but those were our our costs to
actually go out and create this new
feature but then we could roll that out
into the product for everybody else to
benefit from as well so you’re in a zone
that’s really hard man it’s like that’s
a tough area to be where you’re trying
to raise money to make your product
better instead of sales and marketing
dollars and you’re such a low amount
that you’re really dealing with you’re
you know you’re excluding the angels and
the VCS and the bigger money so honestly
your best bet is funded through your
customer since you already have a
business and it may not be exploding out
yet but it will soon and and see if they
pay a premium they get that specific
feature in belief those are watching
like the video you can subscribe to the
channel see more videos just like this
thank you so much I’ll see you soon
question for one of my YouTube viewers
love you guys johnathan who wrote in to
say excellent advice Evan I’m on the
expansion capital train right now got a
product of customers but I’m struggling
the scale because our software needs an
algorithm update any advice in that
front wouldn’t take more than $20,000
great question Jonathan and honestly you
don’t have a lot of options the reason
is because you’re not really on the
expansion capital train expansion
capital is when you are improving your
concept and now you need marketing
dollars to help you grow right so you’ve
tackled this one market and now you’re
ready to grow to another market and you
need to hire a salesperson or you need
more marketing dollars to help you
expand that’s expansion capital what you
need is R&D money you got to put money
back into product development and
investors hate funding that that’s the
worst kind of funding to go and ask for
help me make my product nobody wants to
invest into that and so at the amount
that you’re looking for 20k
you’re not going to get it from a
venture capital this is way too small in
angel investor usually looking at a 50
thousand dollar limit so you’re beyond
you’re you’re too small for that you’re
really looking at your personal savings
you know visa maybe bank loan on a
personal guarantee the government grants
and loans but there’s a huge cycle you
have to wait to get it honestly your
best bet is to grace’ from your
customers right if this feature was so
valuable and so helpful and your
customers are asking for you either use
the capsule that you’re getting from
your business or if somebody really
really really really has to have it then
you have them pay for your development
this is something that I did over and
over again with my first software
company it was biotech software and it
was started by these two founders and I
joined as an owner and they they were
the programmer so they put all in all
their time to create the product and any
new features it would have to do
themselves but when we got a new feature
request if it was widespread enough that
we felt like everybody could benefit
from this
we used the cash flow that we have from
our business to
support and say okay here’s what we’re
going to go and create but if somebody
really really really really wanted a
feature you know we had one customer who
needed to have it translated to Spanish
like I had to be in Spanish like that’s
not our market yet we’re not ready to go
there we have to have it in Spanish so
we charged them for and they paid for
our development cost okay we can make it
for you in Spanish we can add this
feature in but it’s going to cost X
amount dollars more and they made a
decision and a lot of the times people
said okay I’m okay with that
and we weren’t making a huge margin
offer but those were our our costs to
actually go out and create this new
feature but then we could roll that out
into the product for everybody else to
benefit from as well so you’re in a zone
that’s really hard man it’s like that’s
a tough area to be where you’re trying
to raise money to make your product
better instead of sales and marketing
dollars and you’re such a low amount
that you’re really dealing with you’re
you know you’re excluding the angels and
the VCS and the bigger money so honestly
your best bet is funded through your
customer since you already have a
business and it may not be exploding out
yet but it will soon and and see if they
pay a premium they get that specific
feature in belief those are watching
like the video you can subscribe to the
channel see more videos just like this
thank you so much I’ll see you soon
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