Ask HN: Have funds, want to create a startup | Hacker News Reader

Ask HN: Have funds, want to create a startup

4 pointsvasilipupkin16 comments

through a fortunate set of circumstances I have enough funds to fund a startup at least through the initial stage and can relatively easily raise more funds through my network. What I need is: a) 2-3 top notch engineers who are interested in doing something new b) a great idea that I would be passionate about. I have experience in angel investing and even some success. Does anyone have any suggestions, interesting ideas, something to brainstorm about? I have a few of my own, but nothing concrete enough that I would be ready to jump on right now

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So, essentially, you are looking for co-founders for a potential startup. And you're willing to put funds on the table. That can be very attractive to potential co-founders. So, great.

But do you intend to put in funds so that your co-founders have a salary at the outset? That would concern me (even though there are legal reasons to actually do that very thing). The willingness to take the risk of foregoing salary and stability to make a run at something will tell you 2 things about co-founders: 1) They are risk takers (which, to a reasonable extent, is something you want); and 2) they believe in the idea. Both of those things go away when you throw money on the table on day 1.

My take on this - look for ideas and potential co-founders without putting the money thing out there at the outset. You want to have a co-founding team that you trust and who trust you, not a team that's attracted to you for your money. The attraction of instant funding can easily cloud your potential co-founders' judgment as to whether you folks could all work well as a team. That could be a potential disaster.

Some instant funding will give you a leg up. But it can't make up for a mismatched founding team.

You don't need an idea or engineers. Look up "premature scaling" -- the most common reason for startup failure. It basically means scaling up for anticipated sales rather than letting sales drive your scaling. Hiring engineers when you have no product (and not even an idea) is an example of that. You currently need zero engineers.

What you do need are some customers. These are people ideally with money who have pain points that can be solved with engineering, and those people are willing to pay a profitable price for that solution.

Ideas have absolutely no value. If you don't have an unfair advantage when accessing a market (like having worked in a certain industry, having family contacts that will buy your product, etc.) then you shouldn't enter it.

You should also assume that any money you put into bootstrapping is being burned in a furnace, because more than 99% of startups fail. This money should be completely disposable, not your retirement fund or anything you need.

You make good points, however, you misunderstood my request a little bit. I am not planning to hire engineers before I have an idea. Rather, I am looking for potential collaborators - engineers who are bored doing the same old thing and want to create something new. Fortunately, for the right people and the right project, I have access to funding. Hopefully, that clarifies things a bit

Also, I do disagree with your statement that ideas have absolutely no value. That's a categorical assertion. Ideas have a lot of value- I have personal experience with monetizing good ideas. I do agree that ideas are only one of the inputs and the details of the execution matter just as much

Ideas have no value for multiple reasons. Other people[1][2][3] have written about this at length, better than I could.

First, they're never new. Someone has already had your idea and, most likely, beaten you to the market with that idea. If they haven't, it's probably a bad idea. First movers have a disadvantage.

Second, ideas should be disposable. If you have an idea and the market won't bite, you need to throw away that idea immediately. Getting attached to ideas kills more startups than anything else.

There's a good reason you can't protect a business idea in the US, the way you can protect an invention or a novel. You can, however, protect a process -- i.e. execution.

I'll give you some honest feedback, which I hope will lead you to a more targeted pitch to engineers:

I wouldn't work with you because you're proposing an idea-first approach, and, as an engineer, I don't need you. I have lots of ideas, and I can build the product myself.

The value of a non-technical person in an early-stage startup is closing sales, ideally before the product is built. If you can't come to me and say, "I have 10 customers who will buy a product that solves [x] problem for around $[y]," then it doesn't make sense for me to work with you.

1. https://www.entrepreneur.com/article/236605

2. https://www.quora.com/What-is-the-worth-value-of-an-idea-for...

3. https://www.forbes.com/sites/jjcolao/2013/04/03/your-idea-is...

Look, you are very categorical in your statements, using terminology like never, always, etc. Why do you assume I am a non-technical person? I am very technical :) I am also not proposing an idea first approach. I am just trying to find likeminded collaborators. By all means, go build your idea yourself if you can :)

Also, online posts talking about how ideas are worthless are just silly. Of course, if you want to sell an idea, that by itself will not fetch any money. But in order to execute, you have to decide what you are going to work on first. At no point did I propose pulling this decision out of nowhere. I am interested in talking to potential collaborators who are interested in brainstorming together. Ideally, it would be engineers who are secure enough ( like me ) from previous success, such that they are not worried about the risk of working on something new

If you don't want to discuss, why post on a discussion site?

> I am also not proposing an idea first approach

Then why do you want to brainstorm? Why do you say the only two things you need are engineers and an idea?

Where did I say that the only two things I need are engineers and an idea?

I want to brainstorm because I am trying to choose what to work on next. I am not going to choose randomly. I am not a random person posting on this site. I've already done big things successfully and want to do more big things even more successfully in the future :)

Also, I do want to discuss. I don't want to discuss whether ideas are worthless ( I have monetized ideas before quite successfully ). I want to discuss the ideas themselves :)

Assuming you get two collaborators, how will be the equity split approximately? 33+33+33? 40+30+30? 90+5+5?

I think the baseline is to split it equally, 33%, unless there is a very good reason that one of the three collaborators deserves more or less than that. Greed is not what is motivating me at this stage in my life

How do you intend to use your own money to fund this startup, then? Unless you intend to just give a straight loan to the company to be paid back with interest at some future date, then this will eventually be an unequal split. That's fine. But just be careful about how you do this.

I'll buy preferred convertible equity probably in addition to common stock, so that I'm both an investor and a founder

That's a sensible approach. Of course, then you won't be entirely equal in terms of your ownership in the company once the security converts.

One more thing: So, you have a 33-33-33 split. That means you can be fired, unless you build in protections for yourself. You don't want to put in a bunch of money into a startup, get fired, and have nothing to show for it.

I'm not too worried about this at this stage. But I agree with you

I have an idea I'm working on. Actually, I get ideas almost daily. What I don't have is engineers. I have been on here for a couple months looking for a co-founder. Add me to the team. Plus I'm already self employed so I don't mind risk and I can sell.

Hi Vasili, drop me an email on rume.gbenedio@yahoo.com. I also think it's important to work on something as a team.

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