

Ask HN: I just got an out-of-the-blue seed investment offer, now what? - mcrittenden

I've been working on a side project web app for the past couple months that has been gaining in popularity, and I just got an email out of the blue from someone offering me seed investment. It was very brief and just asked if I would be interested in seed money in order to "add more features quickly".<p>I'm interested in discussing it further, but unsure of the proper way to respond. I've always been a salary man and I'm completely ignorant about the typical process here. Do I just respond with "Sure, I'm interested, what are you thinking?" or do I make an offer myself and see how he responds or what? What would you do in this situation?<p>To complicate things, the app is completely free and I am making no money off it whatsoever, so I assume that will have to change in order for him to really invest.
======
18pfsmt
Before talking _any_ numbers whatsoever, you should have a face-to-face. Make
sure both the product vision and the path to monetization are clear to both of
you (or, at least you generally agree on direction). Once you've cleared all
the other possible issues (e.g. how to incorporate), only then should numbers
be discussed.

~~~
mcrittenden
What if relocation isn't an option and the guy lives halfway across the world?
Does that present a problem in your mind or is a phone conversation
acceptable?

~~~
18pfsmt
I think a phone conversation could be ok. One thing to note, I believe the
only incorporation option you have for investors outside of the US (assuming
you live in the US) is an S-Corp. I guess my main point was to make sure
you're on the same page as the potential investor before talking numbers.

------
brudgers
Is the offer a potential solution or just a distraction?

If it is a potential solution, then do you want this person as a partner in
your business?

If the answer to the second is "yes," then a "Gee, I never thought about it"
is enough to see where it might go. Otherwise, let it go as the distraction
that it is.

------
pitdesi
This is a good time to think about what you want the future of your app to
look like. If seed money will get you there, think about how much you'll need.

I would respond with "Sure, I'm interested, what are you thinking?" anyway,
but make sure you've thought about what will be enticing to you.

