One thing that has always frustrated me about being a start up is some of the arrogance of it all. A start up can spend a hundred thousand in a year hunting down a hundred thousand dollars of investment money. How you ask? Well let’s say it cost’s about $5,000 for each attempt at getting start up capital. That would be the costs of air travel, cab fare, food, hotel, etc. Let’s break that down for those that are already trying to shoot holes in that theory. To travel to any major city is going to cost about $1,500 for air and hotel if you plan far enough in advance. You can blow through $100 in cab fare easy. Food? Well, unless you really luck out and get a hot dog cart right outside your hotel you are going to spend about $100 a day in food at least. You should figure about three days since you will want to get to the location with enough time to be prepared for something going wrong. So arrive the day before, go to the start up funding event the next day, go out for drinks that night so you can get more face time with those important people, then leave the next morning. If the event lasts a few days this price goes way up. So we are about $2,000 if we use a few cost cutting sites like Orbitz and the like.
Now if you are going to Tech Crunch Disrupt, but are not an actual presenter you need to pay up another $2,000 to be part of “Start Up Alley“. Most events like this will end up charging you in some way. So don’t for a second think that this is the exception. This is pretty standard. Now we are up to $4,000. Add in suit rental, drinks, costs of presentation, some swag to give away at your booth so people remember your company, etc and you can rack up that last $1,000 pretty easy. So there is your $5,000. For those that are more experienced at finding cheaper ways to travel, remember that you will probably need to pay for two people so you come across as a team.
Now I’m sure some can punch holes in this here and there. Sure, split some hairs if it makes you feel better. The truth is that if your start up is truly a new concept or idea people will take a long time to be convinced they should fund it. So you will have to go to tech and start up events a couple times a month. After about a year of this you should be able to get some “Angel” funding. Awesome! Congrats! You just spent $100,000 to get your first $100,000. Silly isn’t it?
Now why do we play this game? Easy. Sites like Tech Crunch and Mashable won’t give you press until you get that funding. Unless you are a major “Venture Capitalist” funded start up, you only get press for getting that funding. The other thing to keep in mind is that if you are doing that many tech and start up events in a year you are getting tons of face time with people you want to have friendships with. So sure it helps your start up to blow through a hundred grand to get a hundred grand, but it seems a bit silly at the same time. Are those relationships worth that expense? Maybe. Will you get as much out of a hundred grand without those relationships? Maybe. But the honest truth is that your start up has to somehow magically come up with that first hundred grand to get that second hundred grand. This is where entrepreneurs like myself want to spend a day every once in awhile just sticking our head in a vice grip and yelling at a close friend to crank it just a little tighter. Not that I’m biter or anything.
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