> They're just about the cheapest form of loan you can get
In what sense? Unsecured credit has the absolute highest interest rates, especially for college students. They are no doubt the most convenient, but cheapest is a bit of a stretch.
In what sense? Unsecured credit has the absolute highest interest rates, especially for college students. They are no doubt the most convenient, but cheapest is a bit of a stretch.
If they need the money to finance operations, then their model is wrong. Never borrow against a credit card for operations, only for AR because of the crazy interest. Otherwise, you end up without sales and large debt. Ask mom and dad, grandma, you uncle, friends if the goal is not not give up equity but you need cash for a longer term investment in the company.
I'd say that at this stage of the game, paying some interest is probably much cheaper than giving up a stake of the business. Not least because paying interest is really annoying and will teach you to make better decisions for cash flow, which will better equip you as the business grows and you do consider paths 2 or 3.
Disclaimer: I'm im Australia, it does seem like credit cards don't hate students as much here. We were all approved for decent credit while studying and it's the main reason our startup is going strong on path 1.
Credit card is one of the most expensive credits available. Economics 101. If you need a loan go to the manager and talk to them, this is cheaper.
"I'd say that at this stage of the game, paying some interest is probably much cheaper than giving up a stake of the business"
Any percentage of zero is zero. If the company goes down, it doesn't matter if you kept 80% or 50% or less, it is worth zero. 100% or zero is zero in the same way. Yes, people have to take care when selling equity, but investors are not only there for the money but also connections and advice.
Our database is the sum of all properties currently on the market that are willing to rent to college students, and that number is small. It is a very competitive, fast-paced market, and that's the reason there is a problem in this space in the first place.
From our experience cold-calling properties, 3 out of 5 rental properties are completely unwilling to rent to college students. Many will just hang up the phone. From the already small number of desirable (i.e. close to campus, not absurdly expensive, etc.) rental properties on the market at any given time, only about 40% are willing to rent to students. But we add new properties to the site daily, so our inventory is constantly cycling.
With regard to our pricing, it's something we came up with last week, and we fully expect it to be increased if our current successes in sales justify it. We have additional monetization strategies in development as well--a $1000 ad is not the be-all end-all of our revenue stream. But hell, at this point we're just excited that someone is willing to pay for this thing we've invested our lives into over the past few months.
You don't need to apply or be approved by anyone you already have access to the funding.