Startups Stack Exchange Archive

Our Crossroad: Finding an Angel Investor And Provide a Free Tier Service Or Commercialising A Service From Launch?

Behind the Scene

I started a startup, attracted number of part-time employees and am in the process of getting more interns. Due to my previous job experience, I cannot tolerate stupid office politics anymore, and in my startup during brainstorming sessions actually the intellectual comments wins not the positions. Based on all that we will be ready to create a show case that demonstrate our service, the software and hardware behind it. We did eliminate ‘middle-men’ as much as possible, so for example we do have our own servers (some bought and some assembled) and we did not go to the backend-as-a-service route.

Financial Issues

We will definitely need some investors so we can launch the product for the country we are in and then expand on that. However, we do not want the investor(s) to be able to dictate what to do and bring the startup to the ground during the early stages.

So my questions are:

  1. Is it possible to find an angel investor without losing the company’s soul in process? Or should we commercialize the service, generate customers and bring the cash flow back to the company?

  2. Many online services could not grow without the early investors (e.g., Dropbox, Google, etc.); and now that we want to provide the service we would like to provide it for free as well, and then perhaps create a business layer and charge for that like Dropbox?

Answer 5438

Investors are usually happier if you’re putting their money to work. That means spending it to achieve the desired outcome faster. Day to day, they’re rarely all over your back unless you’re under-performing – in particular by not spending fast enough for their taste.

As for bootstrapping your business, it is feasible as a rule but it requires a proper plan… which you do not seem to have based on your question. Make up your mind on whether you’re a premium or a freemium service based on the market feedback you have, and spec out the resources you’ll need to execute. You’ll then know whether investors are needed, why, and when.

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