Funding for IT Consultancy Startup
29 May 2001, 02:35 PM
#1
Scooby Regular
Thread Starter
iTrader: (3)
Join Date: Dec 1999
Location: UK
Posts: 13,274
Likes: 0
Received 0 Likes
on
0 Posts
As you may or may not know, I was recently made redundant. Since that time, myself and a couple of collegues have formed a company called Ventric Consulting. It's an IT consultancy offering services in e-business (customer relationship management) and core systems (such as file & print, and email).
We've spent the last few weeks documenting practises, and renewing IT partner contacts, as well as crack on with two projects.
We now have the fun of seeking funding. Problem seems to be that as a consultancy, the value of the business is based on the people that are employed.
Does anyone have any advice on the most effective way that we can market ourselves to prospective business angels, the funding amount is up to £100k in exchange for equity in the organisation?
If anyone can help or has any tips (or discuss some work prospects) Please drop me an email or give me a call.
Thanks
Andy
email - andrew.tang@ventric-consulting.com
office - 01483-222701
We've spent the last few weeks documenting practises, and renewing IT partner contacts, as well as crack on with two projects.
We now have the fun of seeking funding. Problem seems to be that as a consultancy, the value of the business is based on the people that are employed.
Does anyone have any advice on the most effective way that we can market ourselves to prospective business angels, the funding amount is up to £100k in exchange for equity in the organisation?
If anyone can help or has any tips (or discuss some work prospects) Please drop me an email or give me a call.
Thanks
Andy
email - andrew.tang@ventric-consulting.com
office - 01483-222701
29 May 2001, 06:40 PM
#2
Scooby Regular
Join Date: Mar 2000
Posts: 1,764
Likes: 0
Received 0 Likes
on
0 Posts
Andy,
Getting any venture capital is going to be difficult as your not producing anything physical and have no real innovative idea and your business is not established, you best bet is to try and rummage up some quick business and then go to a friendly bank manager and give him you business plan. Be prepared that you've little(none) chance of getting any money unsecured so all your partners will need to up a guarentee for the cash e.g. your houses or stocks/bonds.
I was involved in a simlar thing a few years back in IT as well and effectively when we had nothing the guys involved just took contracts from agencies but all cash got paid into the business. The biggest issue you may get is agreeing what the fixed salary needs to be, we did it the same for all regardless of skillset. So be carefull who you let join initially if you do this.
This could be quite a problematic approach as some people may have hotter skills than others, better you find out early who's thinking short term and let these guys go as they'll always be thinking they could do better on their own. Your best bet is to start looking at tenders for IT support and provision of hardware for Government or local councils as they need to by law open to tender. Thats how we got through the first year building and selling PC's to Joe public that we self built and getting support contracts for Lawyers offices,Garages and Local Government. I rapped it after a year as I wanted a bigger house and could get double what I was taking from a permy position, two guys still involved now but moved away now from PC's,Sales and general support to graphic design and engineering modelling. The agreement we had stated that if you left within first 2 years you initial equity input and any business worth was lost to you, this maintains some loyalty but only if your making cash
Get all your CV's up to date and send them to every consultacy around e.g. KPMG/JP Morgan etc in a big pack and tell them your setting up and would be happy to body shop your guys on a daily basis, they'll sell your services for double what they pay you but NEVER try to circumvent them as they will drop you like a stone and if they get big contracts you could end up with loads of ongoing work as its easier for them to sell on your guys than hire permanent themselves.
All the best
Campbell
Getting any venture capital is going to be difficult as your not producing anything physical and have no real innovative idea and your business is not established, you best bet is to try and rummage up some quick business and then go to a friendly bank manager and give him you business plan. Be prepared that you've little(none) chance of getting any money unsecured so all your partners will need to up a guarentee for the cash e.g. your houses or stocks/bonds.
I was involved in a simlar thing a few years back in IT as well and effectively when we had nothing the guys involved just took contracts from agencies but all cash got paid into the business. The biggest issue you may get is agreeing what the fixed salary needs to be, we did it the same for all regardless of skillset. So be carefull who you let join initially if you do this.
This could be quite a problematic approach as some people may have hotter skills than others, better you find out early who's thinking short term and let these guys go as they'll always be thinking they could do better on their own. Your best bet is to start looking at tenders for IT support and provision of hardware for Government or local councils as they need to by law open to tender. Thats how we got through the first year building and selling PC's to Joe public that we self built and getting support contracts for Lawyers offices,Garages and Local Government. I rapped it after a year as I wanted a bigger house and could get double what I was taking from a permy position, two guys still involved now but moved away now from PC's,Sales and general support to graphic design and engineering modelling. The agreement we had stated that if you left within first 2 years you initial equity input and any business worth was lost to you, this maintains some loyalty but only if your making cash
Get all your CV's up to date and send them to every consultacy around e.g. KPMG/JP Morgan etc in a big pack and tell them your setting up and would be happy to body shop your guys on a daily basis, they'll sell your services for double what they pay you but NEVER try to circumvent them as they will drop you like a stone and if they get big contracts you could end up with loads of ongoing work as its easier for them to sell on your guys than hire permanent themselves.
All the best
Campbell
30 May 2001, 12:53 AM
#4
Scooby Regular
Join Date: May 2000
Posts: 869
Likes: 0
Received 0 Likes
on
0 Posts
Andy, I think you may find that to set up your own consultancy, you will have to be 'self funding' for a while ie you need to cope without being paid until the money starts rolling in. We had a look at this last year and though we found a few investors, none were prepared to put cash in until there was a decent sized project signed up...
Venture capital is hard to come by at the moment, even more so for anything that is vaguely related to 'dot com'.
As Campbell said, you have little to offer a VK firm - they usually want a product or an idea as opposed to just a few people who would like to run a business - they do not know if the people are any good.
I'd say the first step for promotion is to finish your website and get it registered with search engines - even though you are unlikely to get any actual work from it. The first thing people are likely to do for an 'e-business' company is check your website and the current one isn't likely to win you the business...
Venture capital is hard to come by at the moment, even more so for anything that is vaguely related to 'dot com'.
As Campbell said, you have little to offer a VK firm - they usually want a product or an idea as opposed to just a few people who would like to run a business - they do not know if the people are any good.
I'd say the first step for promotion is to finish your website and get it registered with search engines - even though you are unlikely to get any actual work from it. The first thing people are likely to do for an 'e-business' company is check your website and the current one isn't likely to win you the business...
30 May 2001, 08:29 AM
#5
Scooby Regular
Join Date: May 2000
Location: MY00,MY01,RX-8, Alfa 147 & Focus ST :-)
Posts: 10,371
Likes: 0
Received 0 Likes
on
0 Posts
Andy
Can't offer any real practical experience on this, as I have never set up my own firm! However, I did used to work for a small VC funded IT firm, so I know what it is like
Good luck with the new venture!
Chris
Can't offer any real practical experience on this, as I have never set up my own firm! However, I did used to work for a small VC funded IT firm, so I know what it is like
Good luck with the new venture!Chris
30 May 2001, 10:49 PM
#6
Scooby Regular
Thread Starter
iTrader: (3)
Join Date: Dec 1999
Location: UK
Posts: 13,274
Likes: 0
Received 0 Likes
on
0 Posts
Kryten,
I appreciate your comments about the site, but it's currently being developed.
The problem is do you look for work, and carry out on going projects, work on business plans, get the methodology in place, get IT partners, or work on the website??
All of that's been happening, and we even had two projects before we decided on a company name! All metodology is done, the business plan and projected figures are completed. Many IT partners are also in place!
Website is currently being developed, and will be finished in the next fortnight or so.
Thanks for all your comments
Andy
I appreciate your comments about the site, but it's currently being developed.
The problem is do you look for work, and carry out on going projects, work on business plans, get the methodology in place, get IT partners, or work on the website??
All of that's been happening, and we even had two projects before we decided on a company name! All metodology is done, the business plan and projected figures are completed. Many IT partners are also in place!
Website is currently being developed, and will be finished in the next fortnight or so.
Thanks for all your comments
Andy
30 May 2001, 11:35 PM
#7
Scooby Regular
Join Date: May 2000
Posts: 869
Likes: 0
Received 0 Likes
on
0 Posts
Andy, I wasn't trying to criticise - I know that the website is often the last thing on the agenda - its just a very public face of any 'e-business' and one that is likely to loose you a deal. I'd suggest you throw something basic together in a day, test it to hell (get anyone you know with a PC to try it out) and register with the search engines: at least that way you have something 'presentable' if someone does decide to take a look.
Getting a revenue stream/projects ought to be top priority - unless you have large personal cash reserves to call on (hah!)
Its really a difficult one to break into as
until you have projects, no-one wants to know because you have no track record - so how do you get the first one?!
Good timing (ie luck!), perseverance and someone who's very good at the marketing/selling side of things seem to be the key factors: it doesn't matter how good you would be at the job if you cannot land it in the first place. There's a reason why top salesmen get paid a fortune....
Getting a revenue stream/projects ought to be top priority - unless you have large personal cash reserves to call on (hah!)
Its really a difficult one to break into as
until you have projects, no-one wants to know because you have no track record - so how do you get the first one?!
Good timing (ie luck!), perseverance and someone who's very good at the marketing/selling side of things seem to be the key factors: it doesn't matter how good you would be at the job if you cannot land it in the first place. There's a reason why top salesmen get paid a fortune....
Thread
Thread Starter
Forum
Replies
Last Post