Post a new topic
    5 Replies Latest reply on May 23, 2009 9:18 AM by DeanMalibu

    Starting a hosting company

    NebulaHosting Newbie
      Stupid enter key :) As I started to say, I'm starting a hosting company. We're offering a way for companies to have their email, web presence, and document management hosted for well under what any other company charges. Even though we're offering more services for less than what is currently available, I have managed to acquire some partnerships that enable me to run at a much lower operating cost so that my margins are still in the 30% range. What I'm looking for is advice on how to approach potential investors. The model has everything (I feel); cloud computing, cost savings for my customers, high margins, and a quick path to cash-flow positive. Any thoughts?
        • Re: Starting a hosting company
          bmt2008 Adventurer
          What have you done to date in regards to seeking investment? Do you have a solid business plan? Finding investors is based on several things. If you need small amounts under $1M - then look for angels or angel groups or private local investors. If more, then look for Venture Capital.

          Most investors look for 30% annualized returns or more and expect to exit within 5 to 7 years after investment. Thus, you must be able to demonstrate this and provide a method of exit for your investors. Angel investors like to invest in industries that they are familar with. VCs tend to also have narrowly defined industries or spaces that they invest in.

          Additionally, while angel tend to get into deals earlier than VC - both like to see some type of track record before investing. This could be revenue, or customers, or contracts in hand.

          Most investors don't invest in products or services. They invest in people - management teams - and their ability to execute. If you have the best idea in the world but cannot execute it - it is only an idea.

          Both VCs and angels like to get referrals from their gatekeepers. Gatekeepers are people that the investor works with - they could be CPAs, Lawyers, Government Officials, etc - could also be other successful business owners in their community or even other entrepreneurs that the investor has previously invested in. As these are people that the investor trusts, then they will listen to their recommendation.

          What I am trying to say here is that your best way into investors of any type is through an introduction from someone they trust and respect. So, instead of going directly after the investor - try to find their gatekeeps and win them over first.

          You can start by visiting your local chamber of commerce and by attending networking events in your area. Start talking to people - don't pitch them - but ask them questions and listen. When people feel confortable, they will talk. When the time comes, they will ask you want you do. This is the time to state what you do and what you are seeking - but don't pitch to them. If they know of an investor, let them bring up the subject. Then, you can ask them for an introduction.

          Hope this helps.

          Business Money Today -
          • Re: Starting a hosting company
            LUCKIEST Guide
            Starting a hosting company, Welcome

            Who are you?? (it is so much easier to write if I had a first name)

            Thoughts. YES Have you developed a Business and Marketing Plan??

            • Re: Starting a hosting company
              Bridge Navigator

              It seems to be a very saturated, high volume - low cost market you plan to enter. How does your product and services compare against some of the big players such as GoDaddy?
                • Re: Starting a hosting company
                  NebulaHosting Newbie
                  My market research shows that while it may seem to be saturated, it is still a growth sector expected to grow by 10-20% for the next several years. My offering is more comprehensive than what's currently available as well as being less expensive. Our biggest advantages are in our SharePoint and OCS offerings. I'm offering full enterprise-edition SharePoint server at a per-user cost of $20/month. Other hosting providers host by the server, charging on average $2000/month/server. With my custom provisioning model, I offer better service with a better SLA for less money. My charges peak at $2000/month/company (if the company has enough users that this will be the cheaper route) and my offer is always highly available. With other providers, you're paying a per/server fee of $2000 so if you want reduntant servers, you have to pay a lot more money. With our OCS offering, we're the first company to offer OCS as a complete telephony service. We charge $10/user/month for OCS with telephony nobody else can match that. We'll be live with our beta program and website shortly,
                • Re: Starting a hosting company
                  DeanMalibu Adventurer
                  Security security security, and cheaper than everybody else. That will push your business faster than you expect. Is your security better than the competition??? How do your prices compare in lets say a years much can they save using your service??