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Ask HN: Get Funded Locally or Not

2 points by ToFundorNot ↗ HN
TL:DR - We live outside of the valley (in Toronto, Ontario, Canada to be exact). We have a capital intensive idea that is proving successful. Should we travel to the Valley, or NY for funding? Or should we try our hand in Toronto?

We're at a quagmire. Our idea is three weeks in, and we're at an annual run rate of 500k gross merchandise moved with a non-optimized process.

Our business is heavily capital intensive (vehicles, and buildings, automation are required for growth and profitability) to grow and in a business that has slow penetration which incidentally also means that when they do switch, they are with you forever.

The downsides:It's seasonal (75% of revenues occur in six months).

The upside: We're seeing on a doubling of business week over week but there's only two of us, and we need drivers, and vehicles to keep up the growth.

We estimate we'll need at a minimum 1m to continue growth and improve the process, if that matters.

Would Toronto be fine for raising money? Or would it be worthwhile to spend a week in the valley to raise funds? (We're two people doing this so a week out would affect our growth rate.)

Appreciate any feedback, thank you for reading!

2 comments

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Grustaf
Sounds like things are going very well, good work! 1 m is not very much for something that is demonstrably successful, if it can scale. There should be people that can pony up the money in Toronto, they are just fewer of them.

Having said that, why not just hire some people to help you run things while you take a week to put together some pitch materials and start making calls? Or just run it for a bit more, then put it on hold while raising funds? Capital raising will take much more than a week in total, but again, why not just hire people? Surely you can get enough money together to pay for a few interns, overseen by you?

In any case, if you managed to launch it so quickly, you probably don't need to worry about pausing it for a few weeks. Just make sure to gather enough data so you can make a convincing pitch!

ToFundorNot
Thank you for your response Grustaf.

Hiring has crossed our minds, in the past we've had less than stellar results with our previous endeavors and while we've learned much from them, we feel we will still have problems hiring the 'right people'.

Also as of current, because our process is not optimized, anyone else doing the job at market value is a money losing operation (drivers). There are still many wrinkles to be worked out which would be smoothed with additional capital.

I figure the takeaway would be to let it ride for the moment as both hiring and funding will be long processes (say 2 month for funding, 2-3 weeks for each hire?).