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Ask HN: Should we pursue VC?

2 points by lsiunsuex ↗ HN
We're a niche website. We target a very specific type of post graduate student.

We're coming up on a year of being in operation (this August), about to break 700 registered students and so far we've been completely bootstrapped. I cover all hosting / development costs, my partner covers live events, traveling, advertising, etc... He's the face; I'm the technical. We both still maintain day jobs (and I still freelance in addition to this, so technically, I have 3 jobs).

Development is slow, but it doesn't need to be fast. The site grows as fast as we can manage to grow.

We have some big aspirations for the coming year; we want to break 1500 students, we want to start publishing (iBooks) a quarterly magazine, we want to reach / do more events...

Should we pursue VC? Until now, we owe no one, nothing; and that feels great! But living 2 lives is wearing on me. I want to do this full time.

I feel like we could do so much more if we had some more cash to play with. Not necessarily hire more staff (though it would be awesome to have another programmer to help me) but to do more events, maybe some "grass roots" marketing, etc... Maybe even get an office and we can hold events at our place instead of always renting out rooms.

What will a VC want? A return on investment is obvious; Will they want to tell us what to do? how to do it? When to do it? If we do 24 events a year right now, will they demand 50 (for example) ?

3 comments

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ig1
It's hard to tell what your startup is from your description, but it sounds as if you're some kind of content/event play in niche markets. It's very hard to raise VC money if your business will only scale with number of employees (i.e. to produce more content).

It can be done (Groupon and General Assembly are examples) but it's an order of magnitude rare than pure pure product startups because scaling people-based businesses is super hard.

Generally VCs look for something that's in a potential billion dollar market and can return 10x growth in the 3-5 year range.

It seems under any of these criteria that your business probably isn't a good match for VC funding.

lsiunsuex
Well, I suppose to get a proper response, I'll need to spill what we do... Any idea worth pursuing is worth talking about, right?

We provide 2ndary education to dental students. We educate students on how to run a dental practice, how to deal with staffing issues, how to find and keep patients. We teach them about some of the more expensive equipment out there. Stuff they can't learn in school because the school can't afford it or it's outside of the time frame they have to teach it. Real, hands on experience; not just videos and literature (although we provide those) but sitting the student down at the machine and letting them play with it. We're putting students in front of professional dentists that can answer real questions, teaching them how to run a business and exposing them to equipment they'll use then they become a professional.

If you were a programmer and I could sit you down with engineers from facebook, google, etc... and you could ask them questions, poke their brains, etc... What would that be worth to you? We do that for dental students.

ig1
It's not typical of the type of business VCs would invest in, but you might be able to find someone interested.

The key questions you should think about are:

1) What's the revenue per student you're making (or could reasonably make) ?

2) How fast can you grow the number of students you serve ?

3) What's the total size of the market ?