Ask HN: Is it time to close my first startup?

https://news.ycombinator.com/item?id=2172239

by msencenb • 15 years ago

13 16 15 years ago

news.ycombinator.com

Looking for a little life advice.

I'm currently debating shutting down my first bootstrapped startup (AdsReloaded.com). It's in the vein of tapzilla, appredeem, and apperang. I "launched" last June and have had about 700 in revenue since then.

The bottom line is that I think it has a lot of potential and it's in a big space but I'm out of money and simply don't have time to put effort into it while going to Stanford. I formed an LLC a little early and the upcoming 4/15 $800 tax is something I can't afford. In addition the competitors in the space all have funding and are able to work full-time on their companies.

Here are what I see as my options:

1) Find angel funding. I want to take about 7 months off (spring plus summer) to give the startup everything I have. So far I haven't had too much luck, mainly due to time constraints. I've had a few informal meetings with angels, although no investments yet.

2) Close the company. Move on, build something else sometime in the future, and concentrate more on school.

3) Find some consulting work. If I am able to find some part-time consulting work I might be able to float the company through the 800 dollar tax. I can do iPhone dev, although would love to do some A/B testing consulting.

4) I'm adding in this 4th option due to the comment below about flippa. Alternatively I could sell it to someone with some spare cash that wanted a pet project; however, I'm really unsure how much the company would go for, if anything.

What would you guys do in my situation?

keiferski3• 15 years ago

Have you considered Flippa? http://www.flippa.com

msencenb5• 15 years ago

Do you mean to sell websites on the side or the company?

I would be open to selling the company as its fully functional but haven't received any offers yet since it's low in traffic / not a huge amount of traction (~600 people have registered).

keiferski3• 15 years ago

Sell your company. If it's between killing it and making a few hundred bucks, why not?

zone2• 15 years ago

kill it, focus on school, and work on your second idea.

bmelton2• 15 years ago

I'm not 100% sure I've read it correctly, but I'm also not 100% sure that closing the company before 4/15 exempts you from owing taxes on the money earned.

I'm horribly ignorant on the subject though, so hopefully somebody else might be able to chime in.

msencenb5• 15 years ago

I'm ok with taxes on money earned. I can't afford the $800 annual tax that is due on 4/15 for businesses running out of california. I already payed the $800 for the annual tax 3 months after the llc was formed (back in september).

bmelton2• 15 years ago

My apologies then, I had misunderstood.

Is that for business operating in California, or business that have incorporated California?

erichcervantez• 15 years ago

If you can offload the website quickly and easily go for it, then proceed with option (2). Who knows, the time you spend trying to sell it may end up increasing traffic ;) I do have to agree with bmelton - how would shutting the site down prevent you from owing taxes come 4/15?

msencenb5• 15 years ago

See comment above..

Thanks for the input though I think that might be the best option at this point.

bdclimber142• 15 years ago

Here's a hard question (I know because I've gone through it recently): What's the least amount you would take for the site?

My experience on flippa has given me some interest, but it seems all the buyers are only interested in existing, stable revenue streams, and not a project that will take some work.

msencenb5• 15 years ago

I would like to recoup about half the costs I have spent on the company (~3k) although that may be a bigger number than I can get on flippa.

Do you have any suggestions on other places to sell?

bdclimber142• 15 years ago

I haven't attempted this, but I think a better route than listing on Flippa (or another site) would be to seek out a strategic buyer, someone who would see $1,500 of value in the website. This could be someone who wants the users, or just the application. To justify $1,500 it seems buyers on Flippa would want a few hundred in monthly revenue at least, and stable too.

Again, I haven't tried this, but what about looking on Elance and other marketplaces for people who are looking to build a similar site. Offer to sell the site and consulting services to set it up for them. To them, the value of a tested application would be worth well over $3k I'm sure.

By the way, I'm in a similar situation with OrangeSlyce.com.

nhangen• 15 years ago

I recently paid both Tapjoy and AppRebates to launch an app and I can say that your contact form is a problem.

I'd like to be able to login and start a campaign without having to fill what I feel like is an old-school style form.

I also think your site could do better with a re-design, including a removal of the video or finding a better thumbnail.

How much does it cost you to run, and are revenues going higher or lower?

Flippa_com• 15 years ago

Some great responses here. I’m naturally biased but would strongly suggest you give Flippa a try if you’re looking for a swift and low friction sale. Appreciate you’re strapped so if you’re interested, set up an account and send it via dm @flippa on twitter or contact our support team and we’ll waive your listing/feature fees to get you rolling.

Ask HN: Is it time to close my first startup?

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