Startup for Undergrads - Financing

SolarNexus

The market for work experience is extremely soft right now, we're meant to be getting 6-9months work experience as part of our course at college, but after a month or so and contacting 500+ companies the college has managed a sum total of 3 job specs for a class of 30+.

So some of us are thinking of starting up a business, so far the college is behind us, but we have a problem - finance.

I've read up on some grant schemes but at most they cover 50%, being students how can we cover the other 50%?

any ideas? we're totally new to this, coming from a computer degree - not business, so any help is really apreciated!

Darragh29

What is the proposed business activity???

SolarNexus

Oh sorry, my bad.

Software Development - particularly e-learning games for kids with disabilities

borninlesotho

SolarNexus wrote: »

The market for work experience is extremely soft right now, we're meant to be getting 6-9months work experience as part of our course at college, but after a month or so and contacting 500+ companies the college has managed a sum total of 3 job specs for a class of 30+.

So some of us are thinking of starting up a business, so far the college is behind us, but we have a problem - finance.

I've read up on some grant schemes but at most they cover 50%, being students how can we cover the other 50%?

any ideas? we're totally new to this, coming from a computer degree - not business, so any help is really apreciated!

That's ridiculous that there is so few opportunities for jobs.

Before you start looking for funding, I'd recommend you write a business plan, even a short one so you know exactly what you're looking for and what you're going to do with it. As a matter of interest how much initial funding are you looking for?

Can you team up with business students in another faculty who are also struggling for placements?

stepbar

SolarNexus wrote: »

Oh sorry, my bad.

Software Development - particularly e-learning games for kids with disabilities

Whose the college? I'd hazard a guess and say it's NCI?

SolarNexus

stepbar wrote: »

Whose the college? I'd hazard a guess and say it's NCI?

As it so happens, yeah

As for the business plan etc. well thats the plan, but its pointless doing up a buisness plan with little to know understanding of how we're going to fund the entire venture.

The costs are essentially just keeping three guys in an office with broadband, renting or purchasing some general equipment (computers, xbox, high-def tv), and to keep us alive with minimum wage for the time.

That last part is not quite as necessary as the rest, as as it stands we may have to work for free regardless.

borninlesotho

SolarNexus wrote: »

its pointless doing up a buisness plan with little to know understanding of how we're going to fund the entire venture.

The costs are essentially just keeping three guys in an office with broadband, renting or purchasing some general equipment (computers, xbox, high-def tv), and to keep us alive with minimum wage for the time.

That last part is not quite as necessary as the rest, as as it stands we may have to work for free regardless.

Hang on, a business plan describes what your business is and what you would do with the money. You will definitely need one, especially if you don't know how your going to fund it!

If you did write one up, you would see immediately unneccesary costs building up like: an xbox, high def tvs, renting computers and an office!!!

For a start-up company you generally would scrimp on expenses:
- work from home
- work from your own pcs
- use your own tv & xbox

So start with some market research. Who would buy your software and how much they'd be prepared to pay for it? Are there any competitors, nationally and internationally and what do they offer etc.

SolarNexus

I think you misunderstood what I meant, I completely agree with the need for a business plan! I just meant that theres little point in fleshing out *all* the details with no understanding of how we're going to fund any of it. But your completely right, we fully intend on fleshing out a proper/accurate business proposal.

Just to cover some specific things you mentioned:

• Xbox - The reason I say this is because mine has already RROD'ed and relying on it for a business is just asking for trouble
• Nobody has a 1080p TV
• Office space is required as we are expected to work in a 'real business scenario' and working from home would never be agreed with by the college. Last time students did this, they werent allowed to use the college facilities, so thats why we *need* an office, not an unessary cost

Using our own PC's on the other hand, is very doable.

We already have ideas of who would buy our software, and how to get it distributed etc. We're meeting with our entreprenuership lecturer soon for help on the business plan.

So, that still leaves finance

stepbar

Lol, I thought so. I was in a suitation like yourself but managed to get a placement from NCI. That was 4 odd years ago and as far as I can remember there was 7 placements on offer that year to a class of 30+. So nothing much has changed I see. Unfortunatly for a college the size of NCI, it's difficult to convince employers that students are just as good if not better than other colleges. If an employer wants a few interns they'll head straight to UCD / Trinity / DCU first.

Anyhow back on topic.

What's the story with the incubation units in NCI? Are they still available? The college should at least be able to provide you with one rent free. You could take this as an opportunity for the basis of your final year project. Do up the business plan and actually create the software next year. At least if you have a business plan, you can then start looking for finance.

Before I would do anything, I would think long and hard about the motivation for going into business with your classmates and ultimatly what you really want to get out of the whole experience.

As for help and assistance, there are any number of HR and Accounting students in NCI plus not to mention a team of lecturers who have plenty of experience behind them. Use them and perhaps as suggested see if any other students would be willing to help out. I'd be also happy to give you a few pointers in private if you wanted. If you really were serious and had a serious business plan in place, I could introduce you to people I know in the bank and see how it goes from there. Unfortunatly, there will be a proportion of this that will have to be self financing.

BenjAii

Solar, any finance you might receive from either an investor or bank loaning to you would be dependent on their perception that your business could make money.

As such, the first thing you need is a business plan outlining how you are going to make money.

You will have had to develop very strong and definite ideas about sales & marketing, before the financing is going to happen

i71jskz5xu42pb

SolarNexus wrote: »

any ideas?

The office. I don't buy that an office is actually required, loads of businesses (especially software) are started around a kitchen table. You do have options however - try some of the incubator spaces - DCU Invent, Docklands Innovation Park Enterprise, the Digital Hub, etc. None of these are obvious fits for where you are coming from but you might be able to talk somebody into giving you a room for a few months.

Finance - forget about grants. None of the agencies will take you seriously from where you are coming and the time it would take you to get the paperwork sorted out would be the bulk of your 6-9 months.
You only option would be family and friends. You might be able to scrimp together enough money to finance second hand equipment or rented.

If you really want to do this you'll have to accept the following:

• You're going to have to put your hand in your (or family's/friends') pocket.
• You're not going to earn a wage - otherwise what are you bringing to the venture (don't say the idea)
• You're going to have to be creative - beg, borrow, steal offices, equipment, people's time, etc. A good deal a schmozing will be required

That's the pessimists view.

All that said, I think it's great that you are looking at this path. The country needs more people doing their own thing.

SolarNexus

Given the oportunity we'd probably work from home, or preferably in one of the colleges research labs, keeping costs low. However from everything we've been told so far, thats not an option, we'll see how it pans out on that front.

I cant speak for the other guys' motives, but I've wanted to start my own business for as long as I can remember - since I was a kid even, so this oportunity really appeals to me, but I know its more hope than anything right now.

I do fear your probably right about not having anywhere near enough time to do the work AND apply for a grant AND even get accepted. But right now our options are thus: work for camara (charity; we'd spend our days installing linux on laptops for africa), do a project for the college (really not a good idea), find a job outside of the college's efforts (which we are doing as well to keep options open) -or- start up our own business.

Honestly, I'd willingly put what little I have to start my own business on my own because I know my motives 100%, but I'd be hesitant when others are involved. Nothing against the other guys, but I know my motives and willingness to work 18hr days if needs be, and put up my own personal finances, I cant speak for them, and wouldnt.

We accept that earning a wage is hope fulfilment, not actual a reality that we're likely to achieve. But our other options (bar actually getting a job) theres nothing new there.

stepbar, it never once occurred to me to use this as a base for our final year project, I really should look into that, thanks!

We're going to see what NCI has to say tomorrow, but thanks everyone for your input so far. It helps.

stepbar

SolarNexus wrote: »

Given the oportunity we'd probably work from home, or preferably in one of the colleges research labs, keeping costs low. However from everything we've been told so far, thats not an option, we'll see how it pans out on that front.

An option not to get an incubation unit? Surely that's what the purpose of these units are? Anyhow, I'd be checking that one out and pushing hard for to see if one can be secured. It would be very disappointing to think that NCI may have reservations about providing such a unit for your use.

SolarNexus wrote: »

I cant speak for the other guys' motives, but I've wanted to start my own business for as long as I can remember - since I was a kid even, so this oportunity really appeals to me, but I know its more hope than anything right now...........Honestly, I'd willingly put what little I have to start my own business on my own because I know my motives 100%, but I'd be hesitant when others are involved. Nothing against the other guys, but I know my motives and willingness to work 18hr days if needs be, and put up my own personal finances, I cant speak for them, and wouldnt.

I think you need to suss this one out before you commit to anything. It's good that you're getting moving now, with exams and everything coming up. But if you don't know what your classmates are thinking, then I'm afraid this could be dead before it even starts.

SolarNexus wrote: »

I do fear your probably right about not having anywhere near enough time to do the work AND apply for a grant AND even get accepted. But right now our options are thus: work for camara (charity; we'd spend our days installing linux on laptops for africa), do a project for the college (really not a good idea), find a job outside of the college's efforts (which we are doing as well to keep options open) -or- start up our own business.

I agree, the options are not great. No one wants to spend 9 months on their own doing a project. And knowing guys who did this, they were none too pleased.

You shouldn't be looking at grants / finance etc at this stage. The next 9 months should be spend researching the idea and seeing if there's a market for same, getting people on board, doing up a demo etc and talking to those who could benefit from the project you have in mind. At the end of the day if the college can't get placements for the class, then they shouldn't be expecting too much. This was my biggest gripe with the work placement (even though I was one of the lucky ones). Why offer such a placement if you can't get students a placement in the first place?

Axwell

SolarNexus wrote: »

Oh sorry, my bad.

Software Development - particularly e-learning games for kids with disabilities

How much experience or knowledge have you in this area, not the games development but the elearning development and catering for kids with disabilities. If you plan to go down this route as your business you would want to be sure you have adequate knowledge to develop for this area, I dont see how doing a course in Software development would give you this.

I agree with Stepbar though that the NCI should be willing to offer you an incubation unit consiering they ant find you a placement. Also I think your list of requirements needs to be considerably cut down. You have an xbox so use that, the fact it RROD doesnt mean the new one wont, its an unnecessary expense and not something the college would have use for afterwards, same goes for a 1080p Hi Def tv.There is absolutely no need for this, you can develope in standard def and then expand to hi def after you are successful at that. A 1080i tv would be enough if not still unnecessary as most games run fine on 720p. Starting off you should be looking to get the basics and get setup your jumping the gun with your list of requirements for top end equipment. When you have something working and are at the next stage then maybe look at getting these.

MagicMarker

Let me get this straight, you want money, so you and your friends can be paid to sit in an office, with broadband, an xbox and a HDTV?

Genius!!!

SolarNexus

MagicMarker wrote: »

Let me get this straight, you want money, so you and your friends can be paid to sit in an office, with broadband, an xbox and a HDTV?

Genius!!!

If merely playing games was our sole intention, would you not think that it would be infinitely more efficient to do so at home instead of making the commute, and presumably defrauding the college by cooking the books so it looks like we did 40hrs per week work, when all we did was play halo?

As much as the idea of working in a company where you're left to your own devices with an Xbox360 and a TV at hand might seem like a dream job, the realities of actually producing a commercial game doubtless kills the novelty sharpish.

SolarNexus

to address some of the stuff Axwell said, I didnt see your post first time 'round, sorry:

Axwell wrote: »

How much experience or knowledge have you in this area, not the games development but the elearning development and catering for kids with disabilities.

We're not experts, obviously. But we do have contacts specifically relating to this; my last college in particular dealt with these sorts of challenges, and I myself have a learning disability; we know people whose job it is specifically to teach such children. So, I think we're educated -enough- to attempt such a thing. Given the alternatives available, in all fairness, it would be hard to do much worse. We've been taking the approach thus far as making an educational game that has at least some modicum of fun, if we can manage even that much, its a major achievement in my books.

I agree with Stepbar though that the NCI should be willing to offer you an incubation unit consiering they ant find you a placement.

We're looking into this, but it doesnt look very likely...

Also I think your list of requirements needs to be considerably cut down. You have an xbox so use that, the fact it RROD doesnt mean the new one wont, its an unnecessary expense and not something the college would have use for afterwards, same goes for a 1080p Hi Def tv.There is absolutely no need for this, you can develope in standard def and then expand to hi def after you are successful at that. A 1080i tv would be enough if not still unnecessary as most games run fine on 720p. Starting off you should be looking to get the basics and get setup your jumping the gun with your list of requirements for top end equipment. When you have something working and are at the next stage then maybe look at getting these.

I honestly cant find a fault in your argument. Your absolutely right.

I just assumed since it was a buiness - a partnership, it would start to make things messy by doing that, but I can see where your coming from, and it does make a bit more sense.

MagicMarker

SolarNexus wrote: »

If merely playing games was our sole intention, would you not think that it would be infinitely more efficient to do so at home instead of making the commute, and presumably defrauding the college by cooking the books so it looks like we did 40hrs per week work, when all we did was play halo?

As much as the idea of working in a company where you're left to your own devices with an Xbox360 and a TV at hand might seem like a dream job, the realities of actually producing a commercial game doubtless kills the novelty sharpish.

Wow, sarcasm is not your forté is it?

homeOwner

My advice would be to scale down you plans. You are talking about doing something to substitute for work experience. Now this has turned into plans for a start-up enterprise. What happens when the few weeks is up and you have to go back to the classroom and study for exams? You wont have time to spend on the startup venture. While there are plenty of organisation that help No one is going to fund a "spare-time" project. By the time you write even the bones of a business plan, you will have run out of time. A BP is the least any funding body will require before giving you money or a grant.

Why dont you concentrate together on developing 1 small area of the overall application that doesnt require spending money and work on that. If you can work together without getting sick of each other and arguing all the time I think you will really have learnt something. When you graduate you can then take that idea and run with it as a proper start-up.

BenjAii

Solar, if you want to focus more on the work experience side of things rather than the starting a business, have you considered places like elance.com ?

would fulfill the criteria college is looking for if presented to them properly...

byrne0f56789

If you start your own business your will learn so much more than your colleagues. It will be harder and your will have more responsibility but you will get much more benefit.

Starting your own business is about learning from your own mistakes. I would say forget about an office. Produce a version of your software as fast as you can and get users. Focus on the technology, because the best way to market is through word of mouth and you will never generate word of mouth with a crappy product.

The only problem I can see is that you will be doing much more work than your friends, with little no instant reward. I know that the problem with the Irish third level sector is that they haven't a clue when it comes to business start ups and entrepreneurship. You may have lecturers who don't understand what's involved mark you down because you went at it on your own. In a way they need validation form an established company!

I wish you all the best anyway.

SolarNexus

Thanks everyone for your help, heres the state of things now:

We've taken on board alot of what you and others have said about the office, starting small, grants and whatnot and are trying for a place within the college (highly unlikely at this stage) or no 'office' at all - work from home. The college so far seems up for it.

That pretty much wraps up everything, zero costs, zero pay, etc.

On a personal note, I'd like to do this as a more 'real' thing perhaps after the fourth year is over, so I may come back to this very subject again, but until that time, we're treating this as merely work experience that MAY (probably not) end up with a project we could profit from.

BenjAii, we havent; but everyone I've known who has tried those sorts of websites have found it a fruitless endeavour; I prefer the idea of our own project in the guise of a buisness/work experience.

byrne0f56789, as for what you said, I unfortunately agree. As much as I dont mind helping people as part of college work, teaching them/helping them, and basically doing upwards of 70-80% of the code; I would find it a very hard pill to swallow to do that as an on-going buisness, and to be "only" rewarded with an equal share. But I've been in the situation before where for all intents and purposes greed has held me back from making something I did a commercial success, and I'm not willing to do that again. So, for this 'work exprience' business thing, I'll keep mum about it, and accept that theres going to be times when I'm doing most of the work for little more than the title 'Lead Programmer' in the credits. As an entry into the buisness, I could do alot worse. And besides, hopefully by then the other two guys will have enough grounding in the technology to be able to do parts on their own.