Quote from Joeblough:
Thank you. When I say exit strategy i was not referring to a "the floor has dropped out" but a "someone is buying us up". This I DO know is what all venture capital firms love.... risk value to large payoff in the end. Did the original VC's have tangible assets in Facebook? Twitter? The list can and would go on and on. I do know that by placing this post in this forum I will be getting slightly backhanded replies, that is to be expected when I do not give more than a two sentence of what I am planning. What I was hoping for are possible help from someone that has tried going down the path I am taking. Its not an easy one but I have faith in my business plan and would have no fear in it being audited by a VC.
Thank you again for your reply.
I'm in VC.....
Your analogy to other companies like Facebook is not applicable. Facebook was started on a shoestring budget. They did not get any big time VC until it was already catching on. You are still at the stage of funding this from your own savings account or personal loans.
I will tell you right off hand why I wouldn't invest in your idea though. First off, I rarely invest in ideas. I usually invest in businesses and there is a big difference. Businesses make money, while ideas cost money. Many people tell me that they are a business because they spent $400 creating an LLC. But they have no real sales, and do you know how hard it is to put a proper value on something that generates no profit?
But occasionally one comes around that is still in the idea phase, but might be worth the risk. Here is the criteria for a "good" idea.
1) large target market
2) ability to pre-sell before manufacture
3) perishable or addictive resulting in continued revenue
4) very high margins
5) easy to understand the value requiring little consumer education
6) low overhead
Your idea fails #1. Do you know what portion of the national population would be interested in a trading game? Less than 1% would be my guess.
Your idea fails #2. All of the cost is development cost, that must be completed before you can even demonstrate the product.
Your idea fails #5. You'll probably have to give it away for free to get people to try it out and in the end it isn't showing them how to make money, it is just building their skill set.
Going back to Facebook... do you know how they first got started? They were a huge success because thy fit almost all of the above criteria.
