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[P]
How DO you find capital?

By Sylvestre in News
Sat Jun 24, 2000 at 06:29:45 AM EST
Tags: Help! (Ask Kuro5hin) (all tags)
Help! (Ask Kuro5hin)

I have developed some network security hardware / software and I'm trying to find money to market it. So far, I can't get the time of day from anyone. I send email, faxes, and call and get doughnuts, zero, zip nada. How DO you find capital today?


The most feedback I've ever gotten was a gentleman from the NSA said it was good technology, but not something he could invest in. With all of the money pouring into BS internet ventures (check FC for some good ones), why can't I divert a small part of that stream to actually build a product and sell it? I'm not trying to get pots full of money for some hype-driven hoe down, I have a product, it exists, I have people interested in buying it, but I can't get over the hump. Help.

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How DO you find capital? | 66 comments (60 topical, 6 editorial, 0 hidden)
Love to see the fallout from this... (3.00 / 2) (#2)
by warpeightbot on Fri Jun 23, 2000 at 10:30:15 PM EST

Not that I have a product right now, and I know how to get a gig, but it's one of those things you file in the back of your mind for when you DO have something to sell....

share your pain (3.00 / 1) (#6)
by eries on Fri Jun 23, 2000 at 10:46:43 PM EST

Boy, do I ever know how you feel. I've been working on a for-real internet venture (not some lame Yahoo-clone, but a real business) and it's really hard to break into those circles. However, my #1 piece of advice I can give is: only go with "smart money." I know that's a bit of a cliche these days, but it really matters who you take your money from. Don't go with someone who doesn't really understand/believe in your idea. Seriously, that's bad news. If you can at all avoid it, try not to get into that whole VC world. My experience with it has been universally unpleasant.

Good luck!
Promoting open-source OO code reuse on the web: the Enzyme open-source project

Finding Capital (1.40 / 7) (#9)
by PresJPolk on Sat Jun 24, 2000 at 12:38:58 AM EST

I check under the couch cushions. Besides the typical pennies, I'll find nickels, dimes, and even quarters sometimes!

freshmeat! (none / 0) (#11)
by thelaw on Sat Jun 24, 2000 at 08:43:17 AM EST

you could always try and stimulate interest by putting information about it on freshmeat.net, and updating it during normal business hours... :)

jon

Angels (5.00 / 2) (#12)
by stbalbach on Sat Jun 24, 2000 at 10:32:30 AM EST

The vast majority of money raised in the private market is done on a very low level through private "angel" investors. An angel, at least in Silicon Valley, is defined as someone in the $50,000->$1,000,000 range. VC's usually wont come in for less then $1M, and usually only after angel resources have been taped out. So if you want money, hit up people you know with money is the best bet. Sending business plans to Angel investment groups is difficult, they recieve thousands and might invest in a handfull its like winning the lottery. In general the first investor is the hardest, and smallest. Once a precendent is set the next investor is easier. Take it in steps and dont try to get it all from one person in the early stages. Also: dont give away the company. The typical process for early investors is to use the money as a loan with a promise that sometime in the future, on a Series A VC round, the loan will convert into stock at a prefered "early investor" discount. In this way you can raise small amounts from many small investors without giveing up any stock. When the first big investor comes in, say $1M, thats when stock valuations are set and stock issued. Otherwise your big $1M investor will want the same valuation you gave the $10,000 investor and youll give away most of the company. Hope that helps. Going through this process for the 3rd time myself.

Re: Angels (none / 0) (#21)
by Sylvestre on Sat Jun 24, 2000 at 03:05:15 PM EST

Right, angels, vc, whatever, I'm just trying to find that coin. I guess rising about the siren call of bbq.com or mypetstoys.com is too hard for a multi-billion dollar market.

Seriously though, how do you approach angels? I'm feeling like that guy in the beer ad who is at the party going "I need some seed capital. I need some working cash. I need money." Then he has the revelation to open "Captian Barkey.Com" or whatever and the old lady cuts loose the money. I need to find some angel and convince him/her it's his/her idea in the first place. ARG.

Thanks for the pointers though,
Sylvestre

-- Firearms are the difference between free people and subjects.
[ Parent ]
Re: Angels (none / 0) (#29)
by stbalbach on Sat Jun 24, 2000 at 10:27:17 PM EST

Here are some rough guidelines. The numbers may be less outside of Northern California which is inflated everything but these are the groups to target for your level. Super Angels typically have hired agents to find deals on a commision basis, agents may work for more then one Super Angel.

1. Over the counter/ Friends and family: $1k - $50K
2. Angel: $50 - $750K
3. Super Angel: $750K - $2MM
4. Boutique VC: $2-$10MM
5. VC: $5-$20MM
6. Institutional: $50MM+
(banks)
7. M&A: $50MM+
(first boston susse)

Get legal advice. Lawyers are traditional match makers since they are the mechanics behind any financial deal they know players and can be wonderfull resources. One well known firm is www.cooley.com they deal with precisely your kind of situation (no affiliation just good experience).



[ Parent ]
Garage.com (none / 0) (#43)
by Dacta on Sun Jun 25, 2000 at 06:58:06 AM EST

No personal experience, but I've read lots of good testimonials - it is supposed to link up startups with angel capital.

Also, go to those "How to start a high tech company" seminars. Make sure you have a two minute summary of your product and try to talk to one of the speakers - they often know people who might be interested.

Hook up with a lawyer who has experience with startups - often they know "the right people"

Also, you might want to adjust the colors on your website. Red on a black background looks good but is a littel hard to read, esp for large amounts of text.

[ Parent ]

Re: Garage.com (none / 0) (#67)
by cable on Thu Jun 29, 2000 at 01:34:47 PM EST

Garage.com is fine as long as you don't mind giving up part of your company to garage.com for getting the venture capital from Angels, who also get a part of your company.

------------------
Only you, can help prevent Neb Rage!
[ Parent ]
Presentation is the key (4.50 / 2) (#13)
by pdcruze on Sat Jun 24, 2000 at 11:13:49 AM EST

IMHO, the key to raising capital is presentation. You're essentially marketing your idea to VCs, investment bankers and business angels. If you can put together a compelling presentation that will interest these people, you'll see interest pick up markedly.

So how do you interest these people? These investors are interested in making money. As such they're interested in the following things:

  • How do you plan to make money? How large is your market? Who are your competitors? Why would people purchase your products rather than those of a competitor?
  • What is your management team? This is a hard one for software developers. While we write great software we're crap at taking care of the parts of running a business. Investors want to make sure they're investment is in good hands. This means investing in startups that have experience in marketing, running a business, finding sales partners and channels, etc.
  • How much money do you plan to make? Investors are presented with lots if investment opportunities every day. All things being equal, they'll pick the investment that will give them the greatest ROI (Return On Investment).

    This is just some of the things that need to go into a proposal. Even if you include all of this there's no guarantee that you'll get funding. But your chances of catching someone's eye will be significantly higher.

    Speaking as a software developer, these are unfortunately all the boring bits of a startup but they are essential.

    A few books of interest to help you get started are:

    High Tech Start Up by John L. Nesheim
    High St@kes, No Prisoners by Charles H Ferguson

    Hope that helps.

  • Venture Capital for Dummies (none / 0) (#15)
    by KindBud on Sat Jun 24, 2000 at 01:20:35 PM EST

    Hate to say it, but there oughta be a Dummies book for us geeks on how to get money and start a business. :)

    --
    just roll a fatty

    [ Parent ]
    Re: Venture Capital for Dummies (3.00 / 1) (#30)
    by Louis_Wu on Sat Jun 24, 2000 at 10:52:02 PM EST

    There is, Starting An Online Business For Dummies by Greg Holden. I don't know if it is "for us geeks", but it's better than nothing.

    Louis_Wu
    "The power to tax is the power to destroy."
    John Marshal, first Chief Justice of the U.S. Supreme Court
    [ Parent ]
    My totally random 2 cents (4.00 / 1) (#14)
    by pete on Sat Jun 24, 2000 at 12:21:19 PM EST

    A couple of earlier posters had good comments, I'll just add: remember the type of people you're dealing with. If you're a typical techie, you may not have ever interacted with people like this before. They want to know one thing: how much money are they going to make off of your idea? They want you to IPO or get acquired so that they can get a good return. Show them how you're going to get there.

    Is is just you? Do you have a team? You're going to find it very difficult to get money if it's just you. As you probably already know, who you are and what you've done is far more important to these people than the actual content of your idea. I'm sure you've heard the stories of CEOs with good track records who can get $10 million with a short PowerPoint. A lot of people have great ideas, but how are you going to execute on them once they write you a check?

    Up until about a year ago, I had always thought, "I'm a techie, I don't need to give in to the dark side, marketing sucks, business people suck, sales people suck, etc." The fact is, you need to start to think about and even live in that world when you want capital. How are you going to market and sell your product? How are you going to make the personal connections which are vital to running a business?

    If you want some good pointers on presentation, snoop around and register at garage.com.

    Finally, I apologize if you've thought about this kind of stuff already, it's hard to tell that from the short post.


    --pete


    Re: My totally random 2 cents (none / 0) (#19)
    by MeanGene on Sat Jun 24, 2000 at 03:00:33 PM EST

    Think of the story of two Steves: Wozniak and Jobs. Without either one Apple would not have gotten off the ground. So, try to find somebody who can help you run a business - deal with sales, marketing, finances. It's not as easy as some (tech) people think. And, of course, having a nephew-in-law working for some big shot dude with VC friends helps a great deal (or even more!). Whether we like it or not - it's still a word-of-mouth game.

    [ Parent ]
    Re: My totally random 2 cents (none / 0) (#39)
    by Sylvestre on Sun Jun 25, 2000 at 12:33:52 AM EST

    I tried to register at garage.com but the mail server over there is fscked! Check this out:

    Jun 24 20:22:00 rsn sendmail[8374]: e5OI9oB24284: to=GarageApply@garage.com, ctladdr=rjones (500/500), delay=09:12:10, xdelay=00:01:00, mailer=esmtp, pri=24870958, relay=mail.garage.com. [207.20.136.95], dsn=4.0.0, stat=Deferred: Connection reset by mail.garage.com.

    Every two minutes for 9 hours. Wack.
    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Re: My totally random 2 cents (none / 0) (#45)
    by pete on Sun Jun 25, 2000 at 11:32:08 AM EST

    Help me decode your email address and I'll forward you the initial mail they send you.


    --pete


    [ Parent ]
    !MAKE CAPITAL FAST! (none / 0) (#16)
    by Anonymous Hero on Sat Jun 24, 2000 at 01:32:10 PM EST

    I keep my eyes peeled to cracks in the sidewalk and the sofa.

    Been there. *blech* (3.00 / 1) (#17)
    by Arkady on Sat Jun 24, 2000 at 02:09:21 PM EST

    I know exactly how you feel. We've been, in our oh so copius spare time, working up a security/privacy system that (naturally) we think is marvelous. I spent two years, off and on, trying to get investment to actually pay folks to work on it so we could get it out and have decided that it's not worth it. Investors are insanely egotistical; I've even shown up for scheduled meeting to find the office locked up and a note saying "please leave your materials on the porch".

    We've decided to put the project on hold for a bit while we look at other mechanisms. Software development has a delayed return, so it's a hard thing to start up. What we've decided to do is focus on another idea that could generate immediate returns and try to find a way to use that to help fund the development project.

    Of course, it didn't help in any of this that we're a cooperative and want to set up the software project so that it's co-owned by the programmers and the users. Investors _hate_ talking to people who aren't desperate to sell off controlling interest. Hell, even when we went through a time when we were willing to do even that just to get the damn thing done they weren't willing to talk.

    We need a new model for project funding. The VC model sucks.

    Turning and turning in the widening gyre
    The falcon cannot hear the falconer;
    Things fall apart; the centre cannot hold;
    Mere Anarchy is loosed upon the world.


    F&F (4.00 / 1) (#18)
    by w3woody on Sat Jun 24, 2000 at 02:49:07 PM EST

    One mechanism for raising initial seed money to get a venture off the ground is what vulture^H^H^H^H^Hventure capitalists call "F&F"--Friends and Family. Most projects I've seen get off the ground did so with an initial round of financing from their friends and their family members pitching in a few grand for a promised return.

    Generally venture capitalists look to see if you have invested your own money and if your friends and family members have invested some of theirs before they pitch in: if you don't believe in your own project enough to put your own money into the project, then why should they put their money in?

    The other mechanism I've seen which relates to this is to use your own personal credit to get a loan from the bank. Related to this is getting a line of credit: basically using your assets to secure a credit so that you can finance on-going projects.

    Of course, as with any business, you need to remember the "three year rule": it generally takes about three years to bring your business to profitability. This is simply because it takes about three years for enough people to (a) hear about your business, (b) try your business, and (c) decide to change their lifestyle/business/whatever to use your business enough on an on-going basis (or at least recommend it to their friends) to a great enough extent to give you an on-going clientel. The biggest mistake most people make going into business for themselves is in thinking they can use next year's profits--without realizing that if they are like most businesses, they won't see profits for three years.

    Good luck with your product!



    Re: F&F (none / 0) (#20)
    by Sylvestre on Sat Jun 24, 2000 at 03:00:35 PM EST

    I have obtained loans from F&F (which I have paid all but the most recent back) and I have funded the company out of my own pocket up to this point. All of my F&F are, to put a fine point on it, broke. They don't have capital on the order I need for the next year. I have no "personal credit", I live in an apartment, I have no assets. I'm not crying broke; I make a lot of money consulting, it's just that the NEXT STEP for my company is to spend $600k-1M USD over the next year to turn this production prototype into something with all the right certs (EAL4 for one), and I'm not going to make a spare $600k this year to fund it.

    Thanks for the pointers though,
    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Two words for you... (5.00 / 1) (#22)
    by Anonymous Hero on Sat Jun 24, 2000 at 04:25:57 PM EST

    Business Plan

    You need a management team and a feasible business plan. How long is it going to take you to make gobs of money?

    Another thing, see if your local city has some sort of company incubator project. Many have very low interest loans available for small companies which will bring jobs into the area.

    The early 90's are over. No more "Hey, I've got a great idea" suddenly becoming "Hey, I'm a millionaire!".

    T

    Re: Two words for you... (none / 0) (#33)
    by Sylvestre on Sun Jun 25, 2000 at 12:20:13 AM EST

    OK. I have tried to develop a business plan, but my butt got sore after three days of pulling numbers out of it.

    Grin

    I have looked into bizplan writing services, does anyone know if they're worth anything?

    How do you recruit a management team with no capital? I can't promise anyone anything beyond worthless stock, and I surely can't provide them with a paycheck.

    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Re: Two words for you... (5.00 / 1) (#41)
    by Anonymous Hero on Sun Jun 25, 2000 at 02:43:18 AM EST

    Problem is everyone with millions of dollars is willing to dump it into eBucketofDogButtholes.com, but have a tangible product that the world really needs and forget it. It guess security products just are not sound-bytable.

    [ Parent ]
    Transmeta (3.00 / 3) (#23)
    by cesarb on Sat Jun 24, 2000 at 05:22:21 PM EST

    I remember reading somewhere that Transmeta had trouble getting the money they needed -- until they coined a ® catch phrase® (Code Morphing IIRC) to describe what they were doing. Maybe you could try to do the same?

    But what is it? (none / 0) (#24)
    by Anonymous Hero on Sat Jun 24, 2000 at 06:52:35 PM EST

    I know a large company interested in certain types of network security software/hardware. If you could elaborate on what it is, then maybe you would find an interested party...

    Re: But what is it? (none / 0) (#26)
    by Sylvestre on Sat Jun 24, 2000 at 08:31:36 PM EST

    http://www.airgap.net/
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Re: But what is it? (5.00 / 1) (#28)
    by rusty on Sat Jun 24, 2000 at 09:38:46 PM EST

    Ooooooh. Very clever. It took me a while, but I get it. :-)

    Did I see you say you'd talked to the NSA about this? I'd be rather surprised if they weren't interested. The only potentially useful advice I can give you is to actually try to determine the size of your market, and make some credible estimations of how much money there is in this. Seriously consider your hardware and software production costs, then double that and add it in (Marketing, Sales), then figure out how many of these systems you need to sell, at what price, to be profitable.

    Then you need to think about who needs this. Many businesses might need it, but most won't buy it. Too paranoid, basically. This has very little to do with actual technology, and a lot to do with psychology. You're selling a product that will scare customers-- the security of this thing will make them think about top-secret underground bunkers, and man in black suits and James Bond movies. They'll think "What do we have to do with these things? All we have are some sales data, and intellectual property files.

    You know, and I know, that security is not just for the Man anymore. But they don't know that, and most people don't want you to tell them that. So basically, you're dealing with the Big Companies, or with the government (or various governments), who don't fool themselves into thinking that they don't have real security needs. On the minus side, your market is fairly small. On the plus side, a small number of very large entities will pay really serious money for things if you can convince them they need it. You might only need to sell two or three systems to become profitable, if they can bear your price point.

    In any case, no investor will listen to you until you can answer questions like these. Then think ahead a year or two. What are you going to sell when you've already installed your system in every one of the 20 or so entities in your market? Do you have development plans? How will you sustain a business built on something that is basically supposed to be permanent?

    Just a few of the questions I'd ask if I were listening to your pitch. Advice from the CEO of a company worth 10 cents, so take it for what it's worth. :-)

    ____
    Not the real rusty
    [ Parent ]

    Re: But what is it? (none / 0) (#32)
    by Sylvestre on Sun Jun 25, 2000 at 12:15:51 AM EST

    Glad to see you get it. Most people never do... probably part of the problem.

    I talked to one guy at the NSA and, as I said, he was interested but couldn't invest. I talked to several other potential customers who were turned off by the immaturity of the market, one, and the lack across the board of EAL certification, two.

    Thanks for the free advice,
    Sylvestre

    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Well... (1.00 / 2) (#25)
    by iCEBaLM on Sat Jun 24, 2000 at 07:57:23 PM EST

    I dunno about you people but I find capitals on the maps in an atlas, sheesh..

    -- iCEBaLM

    Re: Well... (none / 0) (#38)
    by Sylvestre on Sun Jun 25, 2000 at 12:31:35 AM EST

    If you own Microsoft's Streets and Trips 2000 (not 2001), search for "the bridge" as a place. That's my little easter egg from when I worked there. We all got to put in a place or two.

    Sylvestre
    Ex-Microsoft US-GEO (and AT-OLS, and ITG-OPS, and ...)

    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Keg Parties (1.00 / 1) (#27)
    by Neuromancer on Sat Jun 24, 2000 at 09:35:13 PM EST

    Hey man, you live in a college town, you live the college life. You wanna do something next weekend, you need revenue, what do you do? ROLL OUT THE BARREL WE'LL HAVE A BARREL OF FUN!

    Re: Keg Parties (none / 0) (#37)
    by Sylvestre on Sun Jun 25, 2000 at 12:28:37 AM EST

    I'm fairly close to the owners of CJ's and my office is right above Mingles, so I'm fairly well connected to the bar/party scene in Moscow, ID

    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Re: Keg Parties (none / 0) (#40)
    by Anonymous Hero on Sun Jun 25, 2000 at 02:37:03 AM EST

    Hell yea! Can you see keggers as a revenue source in the FTC filings? heh

    [ Parent ]
    An tiny bit of advice (4.50 / 2) (#31)
    by Anonymous Hero on Sat Jun 24, 2000 at 11:40:30 PM EST

    From one consultant to another. I read your site at www.airgap.net.

    - Contingencies against competition. Have you a plan B, C, C2? What happens if the competition copies your concept; after all, is it that hard to make an OpenBSD box which only passes a couple of formats through itself?

    - Use PR. Broadvision is a piece of crap. But no one really knows what it is, and it implies a new world of interactivity. What you are selling (and you are being capitalistic, so you are not being just technical) is a security solution, not just some box that you put here & there. How does it work? Membranes. Insulation.
    Now of course, it is quite possible for one to lose their head over this. I am only referring to a difference in perspective, not some huckster show. Just understand their needs, as you would wish they understood yours.

    - Modify your site a tad. It seems apologetic. And move your list of competitors to the business plan under the section where you discuss them, or put something around that list on your front page so it seems you're not in such a commodity market.

    - Don't need. You are well-fed, have things to look forward to in life. You don't need their capital; instead they might need you. And the more you need, the less energy you have to innovate further or develop new things once you have your infrastructure in place.

    - Growth. Keep in mind this is most important, from their perspective. Growth increases value of stock. Can you manage growth? Do you have a flexible strategy to deal with many orders and installation?

    - Point. Finally, what is the point of your technology? Few people have truly mission-critical systems where people die, so mostly they buy security to decrease cost either directly or in risk analysis. Did you have access to intrusion stats in the companies you've worked with, that your product protects against? Is there a service you can provide beyond the sale?

    It is a good product, too bad it wasn't brought out in the middle of the DoS attacks against large companies, or one of the MS email virus attacks. In the worst case, you could develop this as a consultant with one of the companies you work with (though this technology seems like it will cannibalize their support). Then you might cash out well enough to develop something else, and control it.

    Links:
    www.pbs.org/cringely
    www.l0pht.com

    Eh, not interested in logging in. mr.hdn at usa.net

    Another tiny bit of advice (none / 0) (#34)
    by rusty on Sun Jun 25, 2000 at 12:22:29 AM EST

    But first:

    Broadvision is a piece of crap.

    Huzzah! :-) (Disclaimer: I work (will work? Am will'n be working?) for a competitor)

    Now back to our regularly scheduled advice...

    Pretty up the website a little. Again, seems silly, but you can make two guys in a geekhaus look like a fairly respectable company, with just a web page design. You look respectable, they take you seriously. Just make sure you schedule meetings elsewhere. :-)

    ____
    Not the real rusty
    [ Parent ]

    Re: Another tiny bit of advice (none / 0) (#36)
    by Sylvestre on Sun Jun 25, 2000 at 12:26:28 AM EST

    Can't we all just get along?
    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Re: Another tiny bit of advice (none / 0) (#42)
    by Anonymous Hero on Sun Jun 25, 2000 at 03:02:51 AM EST

    Well the geek house idea is out. Ry is way up north (when he's not surfing on my couch or sleeping in the van) and I am in Silicon Valley. I'm sure he feels like he's on a band tour, except without the chix. Somebody's gotta be down here where the action is, at least for a while. :) -Tom

    [ Parent ]
    Re: An tiny bit of advice (none / 0) (#35)
    by Sylvestre on Sun Jun 25, 2000 at 12:24:53 AM EST

    Great points, indeed. I could answer some of them but that would give away my hand. The idea for the airgap is the first step in a master plan... I really only want to sell them so that I can buy them myself for my next venture.

    I will edit the HTML this weekend, I don't really see where the apologetic tone is but since I've written all the text it's kind of hard to see beyond the trees for the forest.

    Many of the other things you say are painfully true. I am putting my own cash into this so I guess you could say I am a True Believer but few people (outside of the military) see the value of the product. It's hard to explain to people... harder than my current job.

    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    need to give all your money to the right people (none / 0) (#44)
    by Anonymous Hero on Sun Jun 25, 2000 at 08:58:49 AM EST

    first you need to give all your remaining money to some nice lawyers. then you will be poor and food will become a priority,

    Why your site is crap (5.00 / 3) (#46)
    by Anonymous Hero on Sun Jun 25, 2000 at 12:30:46 PM EST

    Aesthetics

    1) Black background - are you sure you're not a "black hat" company??
    2) Red text on black background is unreadable
    3) Your mascot looks evil, change it or preferably get rid of it, investors would probably prefer a padlock or key or maybe a picture of the product

    Suggestions: Blue looks professional & corporate image. White background is standard and works. Other colours: mustard yellow is good for blocks (in tables), but not as a background.

    Font: either have a stylesheet and specify

    font { font-face:arial,verdana,helvetica; color: #222222; font-size: 10pt; background:#ffffff}

    or have tags like [font face="arial, helvetica" size="1"]

    Main Page

    1) "We secure the world". No you don't. Lying doesn't increase credibility
    2) Take your competitors off the front page!! a) their sites are much better b) one of them has a diagram on the front page explaining how it works - they look like they have backing for a start, you look like an underground MP3 site without the music
    3) "nearly unbreakable security" - change these words - okay, so unbreakable security is unachieveable, so don't compare yourself to something that is unachieveable! "The most secure product on the market" sounds much better.
    4) It's your entry point to get people interested - you need a lot more. Use at least 2 columns (in tables) on the page, links down the side or across the top.

    Features

    1) Most companies would prefer an integrated product that they can just plug in and it will work. Who gives a damn about "complete source code" - that's such a geeky thing when you're trying to provide a more business-like facade.
    2) "We're small. We're hungry. We'll be more responsive to your needs than the big guys." Try, "We're a young, dynamic company. We will respond to your needs, to help protect your business". Note the emphasis on your - make the customer feel valued. They want to know what benefits they get, not your inferiority complex (which is how it comes across).

    Summary: rewrite this page, go to sites like Verisign, RSA technologies, SSH technologies etc and see what words they use to encourage corporate confidence.

    Executive Summary

    1) You could put this on the front page, maybe.
    2) It's supposed to be something that a business person would look at ("executive")- cut the technical stuff and explain why people should install it on their networks. Diagrams would do well here.

    Options

    1) Grey, black white red ... what??? none of this page makes sense.

    Use Scenarios

    1) This page has better content, reformat the page

    FAQ

    1) Who are you, oh just two geezers, no apparent qualifications, etc ... SELL YOURSELVES!
    2) Are you a company? You haven't told me yet. What's your company name, your partners, what affiliations/accreditations do you have, etc, etc
    3) Supply a phone contact
    4) Your FAQ is titchy, enlarge it vastly

    Bios - this boots a computer, or it's plant food.

    1) Wow, found out about your company at last!
    2) "Nothing happened until Tom Pettigrew kicked Ry in the butt and told him get on with it." - and you're expecting funding???
    3) Put up more extensive biographies, "but he would probably deny that today" - more negativity
    4) Call it something more like "Executive History" or "Corporate Background" or something. Hide the fact that there's only 2 people.

    Q&A

    1) Isn't Q&A supposed to be the same as the FAQ - if I wasn't going through your site, I would have ignored this page, which turns out to be the most important.
    2) Call it "Product Overview" or something. Change the URL tech.html to something less geeky. It all counts!
    3) Can't you do an animated diagram of how it works - even click-through links on a .jpeg for each stage would be better than nothing. Reading text on how something works is always hard going, e.g. RFCs

    Other things

    Me: I've done small companies analysis based purely on websites before - sorry, but your site is the worst I've seen, and no-one would give it a second thought. Thanks for the handy links to your competitors - I might take an interest in them.

    No white papers for me to download, you haven't sold me the product in any way - and I'm expecting this at the very least!

    More diagrams, picture of your product seeing as you say have one - gives it some credibility. In marketing theory, people want to touch your product - seeing a picture of it (maybe rotate/different angles a la toplayer.com) is the next best thing.

    There's more, but sort out the fundamentals first, overhaul the whole site and put more content on it (doesn't necessarily have to be the corporate buzzwords, your tech page needs more stuff for a start).

    Have you got IP? Patent? Trademark? These things will all encourage investment. Do SWOT analysis (strengths, weaknesses, opportunities, threats). You need 6 reasons why you can stay ahead of the competition - getting a patent is pretty essential. The patent is worth the money, not the product.

    Good luck with your site/product, etc.

    Yes! (none / 0) (#47)
    by rusty on Sun Jun 25, 2000 at 02:58:01 PM EST

    Despite the rather confrontational subject line, yes, I agree with this 100%. Thank you, AH, for doing the detailed analysis that the rest of us were too lazy to do. :-)

    ____
    Not the real rusty
    [ Parent ]
    Re: Yes! (none / 0) (#57)
    by Anonymous Hero on Sun Jun 25, 2000 at 09:17:12 PM EST

    Well if he actually knew us, he would know that we are
    rather confrontational people, so no offense taken. :) Thanks for the many suggestions! -Tom

    [ Parent ]
    Re: Why your site is crap (none / 0) (#48)
    by Sylvestre on Sun Jun 25, 2000 at 02:58:24 PM EST

    Thanks! I'm on it now. Belial was actually re-doing the color scheme etc. Few of the content issues have been addressed yet because I just got in, but I'll work on it today for sure.

    I do appreciate everything you said, btw, and that you took the time to read the whole thing.

    Sylvestre

    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Re: Why your site is crap (none / 0) (#49)
    by belial on Sun Jun 25, 2000 at 03:18:43 PM EST

    The old color scheme/logo was somewhat of an inside joke.
    killer rockhopper penguins taking over the world and what not.

    Hopefully this rev should fix that.
    Someone please tell me if the colors look like crap on windows/macOS CRT displays.
    I have gone all *nix/LCD here and although great for xterms, it is not so
    great for design anymore.


    [ Parent ]
    Re: Why your site is crap (none / 0) (#64)
    by cable on Mon Jun 26, 2000 at 05:45:57 PM EST

    It is a good start. When I created our website at NORMAD.COM I generated it on the fly with PHP depending on what button is pressed.

    It is designed for a 800x600 screen with at least 256 colors. I think 640x480 16 color screens may not view it without dithering or scrolling.

    I didn't use style sheets to keep the site simple, and workable with most browsers. But I would welcome feedback on things I could change.

    Is the banner placed at the right position? Someond told me that having a banner at the top makes a web site look too commercial, so I should move it to the bottom. PHP generates the banner and the advertisement it shows.

    ------------------
    Only you, can help prevent Neb Rage!
    [ Parent ]

    A little bit of thought (none / 0) (#50)
    by Anonymous Hero on Sun Jun 25, 2000 at 03:57:21 PM EST

    Well, I put a certain amount of blame on the VCs he's met. They could give him some advice, create some loyalty for themselves and their firms, but they'd rather act like a pack of dogs. Don't their companies need good tech people, and don't they provide some management for said companies?

    The main thing is that he have a vision. A vision to provide something much better than his competitors. He talks about a 'master plan,' which implies he has more ideas than just this one thing. Sounds like this product is just commodity boxes loaded with either an OpenBSD or Linux drive image. No input devices, etc that allow intruders to compromise them. Good, that provides a better price point than the competition.

    He could refashion himself into a consulting company. One product he has is this box. A consulting company has great leverage, since they can plug their own solutions (or add margins on top of other products). That's a business model. If he loves his customer or truly cares about security (while retaining sanity), he just might excel.

    His competitors have websites that are basically glorified storefronts. (Although I kind of like Whale.) They can be blown out of the water by intelligent design; say, one with a messageboard for his customers; things that facilitate the security process. PDFs are gratuitous and hide information, but it's trivial to have them in HTML as well.

    I wouldn't say "Your website sucks," I would say that it doesn't accomplish its intended purpose.

    The range of security for a company is wide. You have that entire field to work in. Don't trust the company to immediately know how to use your technology, and which networks to partition with your membranes. Their work is specialized elsewhere, and they come to you because they can't effortlessly change tracks and deal with security.

    I rather hope he doesn't mess with patents, except defensively. They're crutches, and he obviously cares more about profit than security if he uses them. Certification is a better barrier. And if he does well, I hope he provides some free services for smaller organizations. Because they grow large and become your clients and remember you. And free is nice...

    Eh, still not interested in logging in.

    Link:
    http://philip.greenspun.com/writing/

    Re: A little bit of thought (none / 0) (#52)
    by Anonymous Hero on Sun Jun 25, 2000 at 05:16:07 PM EST

    Well, I put a certain amount of blame on the VCs he's met. They could give him some advice, create some loyalty for themselves and their firms, but they'd rather act like a pack of dogs. Don't their companies need good tech people, and don't they provide some management for said companies?

    Why should VCs bother helping him? They get at least hundreds of applications for money every day, and they have to pick out the ones worth considering. VCs don't work for companies, they work for themselves (or just a company full of VCs). So, no they don't need tech people. Management? why should they provide that? It's the companies that come to them who are supposed to have a strong management team.

    The main thing is that he have a vision.

    I have lots of visions. Guess what, I'm not getting funding for any of them. Visions are practically worthless, unless you're trying to define the future of a well-established company. VCs want to see products, facts, figures, reasons why they should part with millions of dollars and then proof that they will get it back and more within a couple of years.

    He's in the right market, of course. The security industry is projected to grow from $2billion to £8billion in the next few years (can't remember where I heard that quote from, but it's sure going to grow).

    His competitors have websites that are basically glorified storefronts. (Although I kind of like Whale.)

    His competitors are trying to sell their products - are you truly surprised they have a storefront? I'm not.

    They can be blown out of the water by intelligent design; say, one with a messageboard for his customers; things that facilitate the security process.

    Message board - are you kidding? Yeah, I can bombard that with all kind of fake information, and you don't want to see negative or neutral comments on there. Better to put up messages on the website from satisfied customers, where you can at least control the content. And anyway, how does a message board help you get VC?

    PDFs are gratuitous and hide information, but it's trivial to have them in HTML as well.

    PDFs are standard on corporate websites, and often contain more technical information than on the website, for the simple reason that most people don't need to know this stuff. They need to know ... there's a product, that it works, that they're going to be sent it ... PDFs are there for the potential investors who will get a technology analyst to look over the product, see any short comings, decide whether the technology is worth it, perhaps arrange a demonstration of the product, etc.

    I rather hope he doesn't mess with patents, except defensively. They're crutches, and he obviously cares more about profit than security if he uses them. Certification is a better barrier. And if he does well, I hope he provides some free services for smaller organizations. Because they grow large and become your clients and remember you. And free is nice...

    This is the kind of crappy idealism you see mouthed over and over again on Slashdot. It's wrong - DON'T LISTEN! Patents are the lead into the market, giving your valuable time up for free to help small companies is a waste of your time. We're not living in some communist / Star Trek idyll society here, he needs to buy food, he could make some money out of his hard work. Who are you to begrudge him? Sorry, but the "something for nothing" crowd always annoy me.

    VCs aren't going to listen to people who want to "make the world a better place". They're going to listen to someone who will give a good return on their investment.

    [ Parent ]

    RE: patents (1.00 / 1) (#53)
    by rusty on Sun Jun 25, 2000 at 07:01:38 PM EST

    I agree with you about patents. There are two ways to look at it: the first is that a patent is an actual piece of property under current law. Software really isn't. VC's will be more likely to give you money if you have a patent than if you don't, for that simple reason.

    The second is that how would you feel if you came up with a new idea, and some other company patented it first, and then sued you out of existence for infringement? Sure, maybe you have prior art, but it's going to cost you a quarter million to prove that in court. Get a patent, and simply use it defensively-- I understand that you don't want to be in the legal business, so don't use it to sue your competitors (you do not have to defend patents like copyright-- a company may choose when and where to apply their patents against infringement withour losing them), just use it to make sure you don't get sued for using your own idea.

    ____
    Not the real rusty
    [ Parent ]

    Symbolic logic (none / 0) (#56)
    by Anonymous Hero on Sun Jun 25, 2000 at 09:15:28 PM EST

    I agree with you about patents.

    a == b &&
    b == c &&
    a != c

    It is therefore possible to agree with you and disagree with the post you agree with. ;)

    [ Parent ]
    Re: Symbolic logic (none / 0) (#58)
    by Anonymous Hero on Mon Jun 26, 2000 at 01:09:00 AM EST

    Actually, if a == b && b == c, then c == a. Or else every computer programmer is in big trouble. ---

    [ Parent ]
    Re: A little bit of thought (none / 0) (#54)
    by Anonymous Hero on Sun Jun 25, 2000 at 08:17:06 PM EST

    Thanks for being my posterboy, I'll take it point by point.

    >Why should VCs bother helping him? They get at least
    >hundreds of applications for money every day, and they
    ...
    >people. Management? why should they provide that? It's
    >the companies that come to them who are supposed to have
    >a strong management team.

    Who sits on the board of directors? Anyone who invests in your company. But you're right and Warren Buffett is wrong; and so is GE and all the decent consulting companies, including the one I work with.

    Read the Slater book on GE, and come back to me in the morning.

    I knew that would be an incendiary post; I threw it out to take peoples' pulse on what they're willing to accept as normal. My first post was normal. My second was WEIRD. With a real VC, they provide more resources than just cash. And they stack the investments in their favor by giving the companies they sink money into, every little edge they need.


    >I have lots of visions. Guess what, I'm not getting
    >funding for any of them.

    Fortune Magazine:
    http://www.fortune.com/fortune/2000/06/12/inn.html
    "Create a cause, not a business"? "Around here, we think we're curing cancer"?

    Crazy visions. -- Except these were quotes taken from the CEO of Charles Schwab. So a dumb idea becomes really intelligent once one of the Big Boys stands behind it, eh? Remember, once you jump on the bandwagon, it's too late to be unconventional.

    NEXT!!!


    >His competitors are trying to sell their products - are
    >you truly surprised they have a storefront? I'm not.

    Neither am I.

    And that's all they are, storefronts. No "value-added," no added "service-oriented content." Where are your buzzwords, BTW? Leave them at BurgerWorld, where you presumably work?


    >Message board - are you kidding? Yeah, I can bombard
    ...
    >Better to put up messages on the website from satisfied
    >customers, where you can at least control the content.

    Wait... did I not say "Messageboard for his customers"? Where did I say anything about making it publically readable? And what is this crap about security being about lies? Lies destroy morale of your employees, they're afraid of telling you bad news. And with the phrase "The guy at the top is the last to know" being a public catchphrase, you want to be the unclothed cuckolded emperor? Or do you let the complaints give you positive PR by showing how responsive and great you are?

    Dell has message boards. Allaire does. I just used both recently. But yeah, you personally can do better, Mr. Gates...

    See you at amazon.com's messageboards, Bill.


    >PDFs are standard on corporate websites, and often
    >contain more technical information than on the website,
    >for the simple reason that most people don't need to
    >know this stuff. They need to know ... there's a
    >product, that it works, that they're going to be sent it

    Microsoft PowerPoint presentations are also standard at corporate meetings... except for the companies like Sun who banned them.

    About PDFs I said, "but it's trivial to have them in HTML as well." Where did I say NOT to have .pdf files? Have both; in Adobe Acrobat it's trivial to spit them out into .html form.


    >This is the kind of crappy idealism you see mouthed over
    >and over again on Slashdot. It's wrong - DON'T LISTEN!
    >Patents are the lead into the market, giving your
    >valuable time up for free to help small companies is a
    >waste of your time. We're not living in some communist /

    Yes, DON'T LISTEN! This crazy GNU zealot tells you bad things!

    Oh wait... did I not say that free services (like your hated Slashdot who got acquired for only many MILLIONS and were given MANAGEMENT SUPPORT) help you gain market share? No, of course VCs just want to invest in companies in saturated niches with no real differentiation.

    BTW, look at the company that only until recently was the #1 company in the US -- Microsoft used its patents DEFENSIVELY.

    You're not Bill Gates after all.

    [ Parent ]
    Writing Your Business Plan (5.00 / 3) (#51)
    by Anonymous Hero on Sun Jun 25, 2000 at 04:56:00 PM EST

    VC Criteria

    • global sustainable under-served market need
    • defensible technological advantage
    • strong management team
    • believable plans
    • 60% IRR (internal rate of return)

    Who needs it?

    FAB (Features, Advantages, Benefits)
    USPs (Unique Selling Points) - you need to have at least 5 unique things
    Market research - identify 10 people and ask, see if you get positive responses.

    Looks like you're heading the right way here, with a positive response from the NSA. Contact other companies who you think might be interested, and see if there is a genuine market need. If there isn't a market need (but there probably is) then don't waste your time going here.

    Defensible technological advantage

    IPR - intellectual property rights:

    • patent
    • copyright
    • trademark

    Defensible technological leadership against well-funded competition (e.g. it would take 5 years for them to write the code, etc). A niche market share is not worth much if a major company can take it away from you.

    I won't bother carrying on - VCs will probably back people with proven experience and someone on the management team who's got good results. That's far more important than the technology. As you've discovered, they're probably not going to give you anything - its much better to look out for angel investors who are more likely to help you out.

    But to get funding, you need to be serious. Get the patent. It may conflict with various free software idealism, but you're looking to sell something here, make money for you - and this isn't an obvious "one-click shopping cart" patent we're talking about here.

    If you can't get the patent, give up. You will have no advantage in the market over your bigger, better-funded competitors, who may already have patents in this area.

    If I may make a suggestion - you may be better off getting the patent, and licensing it to the bigger security companies in this area. Try and get at least one wellknown security consultancy company onboard - they give you more credibility, and can help sell your product.

    Whilst writing the business plan, a good rule of thumb is that the tech part of it should only make up 2 lines of the whole. You want a business plan, development plan, marketing plan (adverts, mail shots, websites), sales plans (distribution, direct sales), quality plans (test the thing, see that it works according to the spec), financial projections (budget, cash flow). It may seem a bit far removed from your product, but companies/banks/investors won't touch you until they're convinced you have a serious plan and you've spent a significant amount of time developing it. Literally, a paragraph can take a whole day to write. And you'll hand in revision 165, or something.

    Re: Writing Your Business Plan (none / 0) (#63)
    by Sylvestre on Mon Jun 26, 2000 at 04:16:34 PM EST

    This is great, I appreciate the time you took to write this up. I'm archiving all this for future reference for sure!

    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    About patents... (none / 0) (#55)
    by Anonymous Hero on Sun Jun 25, 2000 at 08:43:10 PM EST

    This is devolving, and this is probably my last post. I did not say "Do not get patents." I said patents suck, at least use them defensively. I used very weak language, because it's not my decision. Patents are only really an issue after you get the funding, anyway, so you can brag all you want about having patented tech to your investors. And your competitors will have no idea if you're going to enforce them or not, so they'll tread carefully.

    To make this whole discussion moot, what kind of patent do you think this membrane technology would get anyway? There's prior art.

    And one case study: There is a rather strong startup once featured on The Other Site who filed a slightly-obvious but asshole patent. I met with them, they bragged about the Slashdot article, and I soon walked away. My logic was that there are costs to following this patent strategy -- I am also a programmer, you see, and I do not bend over. You may screw over the customer, but you do not take away my programming field.

    All economic and businesslike. I have no moral feelings about this; I simply do it because I can.

    Now I think that Sylvestre has quite a few opinions, and like a budding CEO he will agree or disagree with them. The argument is the point.

    Re: About patents... (none / 0) (#62)
    by Sylvestre on Mon Jun 26, 2000 at 04:15:28 PM EST

    Agreed. I was looking for this type of discussion... this is great. As for a patent, that's coming, there is no specific prior art for this type of application.

    Sylvestre
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    Another option... (none / 0) (#59)
    by soulhuntre on Mon Jun 26, 2000 at 09:10:14 AM EST

    Finding capital is tough, and when you do find it how do you know you can trust it? Feel free to take a look at what happened to us and what we are trying to do now.

    You can also contact us if you want and we might be able to feature your companies story on our site as well, we would love to help another company if we can... that's what the net is all about for us.



    Re: Another option... (none / 0) (#61)
    by Sylvestre on Mon Jun 26, 2000 at 04:13:52 PM EST

    Thank you, I read your website, very interesting.
    -- Firearms are the difference between free people and subjects.
    [ Parent ]
    OK, I assume you have a good business plan? (none / 0) (#60)
    by Alhazred on Mon Jun 26, 2000 at 09:33:06 AM EST

    If you don't have a good business plan, then have one written. Talk to the SBDC and the SBA, etc. In fact I would knock hard on the doors of government. Find a place that has a "business incubator" program somewhere. Get the SBA to loan you money, or regional development corporations, etc. The SBA and the SBDC will at least know how to get you in touch with the government people that have money. Its not enough to get LOADS of capital, but it can give you enough to start putting your plan in action, and if your product doesn't require a huge up-front investment then at least you may get to the point of having a few sales.

    Remember, for every $400 million IPO that happens, there are 10,000 non-starters, and 20,000 more businesses that go small cap.

    Also start talking to bankers. Find out who is rich in your area and get to know them. Do some contract work here and there and build up connections. Go to every social function that might attract money people, keep every phone number, card, resume, brochure, etc that people give you. Eventually you will dope out who has money.

    Go to established businesses that operate in your region. IT contractors, networking firms, hardware developers, anyone you might partner with.

    Figure on taking on business partners. Nobody gives you money and doesn't ask for some control of the company.

    Consider the possibilities of open sourcing what you are doing. You could get your engineering done for free and be able to make a nice living doing the hardware end of it, plus some consulting.
    That is not dead which may eternal lie And with strange aeons death itself may die.
    Hmm (none / 0) (#65)
    by Anonymous Hero on Mon Jun 26, 2000 at 07:46:47 PM EST

    "No matter how hardcore the person attacking your network is, his bits won't cross over our Airgap."

    That is well dodgy!

    Reword it - the rest of the site looks better now :-)

    What to do if your partner can no longer work? (none / 0) (#66)
    by cable on Wed Jun 28, 2000 at 06:34:30 PM EST

    My partner just suffered a heart attack at 29 years old. This means the business only has me left and a contractor (who just took a two week vacation last week) to take care of it.

    Granted I can't find another partner real quick, and contractors have to go through an extensive screening process. What do you do if suddenly you are the only person who can run the business? Then what if you can only do it part-time in the evenings and weekends because you have a primary job and your business is a secondary job?

    Should I:

    A> Close down and disband the business. The only stock out there is privetly held by the company. Restart a new business when times get better.

    B> Keep the business going and hope that the contractor comes back in time, and/or the partner recovers.

    C> Keep the business going, do the work of three people, get so stressed out that I have to quit anyway?

    D> Retool the business from a Service Computer business to a Development and Software applications company?

    Our business page is at http://www.normad.com if anyone wants to look at it.

    ------------------
    Only you, can help prevent Neb Rage!

    How DO you find capital? | 66 comments (60 topical, 6 editorial, 0 hidden)
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