How do new businesses work

jsmoke

jsmoke

jsmoke

Soldato
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17 Jun 2012
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I mean financially, for example, say I wanted to start a new games software company and I had already done a lot of the game engine in my spare time, so I now need artists, mappers and the rest etc.

So at minimum I need a team of five extra people, and that's a tiny team. Now to pay them is at least £30k per year, so £150k at least in salaries, plus software/hardware and business taxes, £200k at least. Are you expected to go and search out funding or how does it work, who's going to risk £200k per year on an unknown company?
 
Unless you've got funds or something you can show investors (a product or some solid experience/track record in your particular field) you might need to collaborate with people initially and have some co-founders sharing the equity.
 
Maybe you could initially attempt something that doesn't require 5 people full time - perhaps bring in a few people on very short term contracts to do the things you're unable to do.
 
There are several options:

* Try to do most of the work yourself.
* Put a strong enough business case together to get a bank loan etc (hard with no track record).
* Get an angel investor to invest in exchange for equity.
* Find other people with the skills and go into business together as partners.
* Find other people with the skills and offer equity in the company as payment, but without being partners.
* Try Kickstarter.

Generally to attract funding you'd need to either have a stunning idea and be able to protect it through some form of copyright or patent (not really possible with games dev) or make a prototype to show the idea is feasible.
 
Getting bank funding is practically impossible. When we started we incorporated and became directors. We need staff because we are busy but we can't take anyone on because we can't afford to actually commit to paye salary. Anyone coming in would do so as director because 33.33% of nothing is nothing. Starting up, unless you have funds is incredibly difficult, you need like minded folk willing to take the risks with you.
 
Bank funding is easy if you have security (ie. a property). If not, that avenue isn't open to you.

An angel investor in a new company is likely to want a controlling share.

Working 18 hour days and doing it all yourself is certainly how I started. Now I have 3 fellow directors and 52 staff.

A like minded business partner will help spread the load but making sure everyone pulls their weight is always going to be a challenge. Consider their other commitments when compared to yours.

Number one tip, don't give away equity lightly.
 
Get your phone cam set to record video. Record yourself begging for a stupid amount of money, I dunno, say ten million pounds or dollars. Give it a ridiculous title,you know the sort of thing that everyone jumps on until its just watered down to meaningless nonsense something like 'epic firsts' post it online and wait for the cash to roll in to launch your company.......:rolleyes:
 
Derek W said:
Get your phone cam set to record video. Record yourself begging for a stupid amount of money, I dunno, say ten million pounds or dollars. Give it a ridiculous title,you know the sort of thing that everyone jumps on until its just watered down to meaningless nonsense something like 'epic firsts' post it online and wait for the cash to roll in to launch your company.......:rolleyes:
Click to expand...

An original and genius idea. Sure to work.
 
Black your face up with shoe polish, dress in women clothes and start using a wheelchair. The government will be falling over itself to give you grants to get your new triple-minority owned business up and running. Also put the word "green" somewhere in the company name.
 
"It takes money to make money..." as the saying goes.

You need investment, be that modern like Kickstarter or VC (angel) funding or traditional like back loans.

Make an iOS (or Android, I suppose) game. Get the bits you can't do freelanced out and invest any profits you make. Rinse, repeat until you have enough capital. Sometimes if you don't have the funds you'll need to start small...
 
Derek W said:
Get your phone cam set to record video. Record yourself begging for a stupid amount of money, I dunno, say ten million pounds or dollars. Give it a ridiculous title,you know the sort of thing that everyone jumps on until its just watered down to meaningless nonsense something like 'epic firsts' post it online and wait for the cash to roll in to launch your company.......:rolleyes:
Click to expand...

I think Arek's already writing a book on that method of investment.

kwerk said:
Black your face up with shoe polish, dress in women clothes and start using a wheelchair. The government will be falling over itself to give you grants to get your new triple-minority owned business up and running. Also put the word "green" somewhere in the company name.
Click to expand...

:D
 
kwerk said:
Black your face up with shoe polish, dress in women clothes and start using a wheelchair. The government will be falling over itself to give you grants to get your new triple-minority owned business up and running. Also put the word "green" somewhere in the company name.
Click to expand...

got to use word "muslamics" somewhere too.
 
That is actually what my old boss did, put the business in his wife's name and got $2 million in minority-owned government grants. Although it somewhat backfired on him when he got divorced a year later.
 
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