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    4 Replies Latest reply on Jun 15, 2008 10:03 PM by valcon529

    Startup looking for a loan or line of credit

    valcon529 Newbie
      Hi,

      We are in need for a loan to start a web-based system for education. We are looking for one of two options:

      1. A long-term loan of 50K to 100K. The loan will be paid back for a period of 3 to 5 years.

      2. A 1-year term loan of 250K to 500K. We are negotiating with an incubator that will fund our activities for 1 year based on reimbursment, so we have to operate within the inbubator (and cover the expenses) for the first year, and they will reimburse towards the end of the year.

      Thanks.
        • Re: Startup looking for a loan or line of credit
          LUCKIEST Guide
          Startup looking for a loan or line of credit, Welcome

          Very Interesting team. Where are you located??
          The team consists of 4 people. First co-founder is a computer science
          PhD student in the U.S.,
          Second co-founder is a
          high-school teacher with 18 years experience
          Third member is a lawyer with an MBA.
          Fourth
          member holds a business administration degree and minors in financing.

          Tell me. How are you going to choose between the two options??
          How will the money be spent?? Have you developed a Business and Marketing Plan that I can read??

          LUCKIEST
            • Re: Startup looking for a loan or line of credit
              valcon529 Newbie

              The team members are from various countries, but the company is registered in Delaware. One of the co-founders (me!) has spent 9 months overseas and has been negotiating this deal with the incubator.

              We do prefer the second option. In that case, the money is spent on R&D activities in the incubator, and as I mentioned earlier, the incubator will reimburse us with the entire project cost at the end of the period. The lender can get the money back with interest, or leave it invested in the company in return for equity shares. The final outcome is a tuned prototype, solid market research, and protected IP (incubator will help protect the IP, without claiming ownership over it). These elements can be used to seek additional capital for commercialization.

              In the second option (lower amount), we will produce a mini version of the product and market it within a limited number of schools. Unlike the first option in which the incubator requires in-house prototyping, which is more expensive, in the second option we are out-sourcing a lot of the development to cheap labor, and similar objectives can be achieved with a lower amount. The difference is that in this option we are not engaing in the incubator and doing this on our own, including returning the money from the revenue we hope to generate.

              Obviously, the first option is better, since the incubator pays back the expenses!

              An entire business plan has been written, and we actually won 3rd place in a business plan competition. Details upon request. Should I email you LUCKIEST?