Alex, Wow. Your insight and pearls of wisdom could not have come at a better time. Thank you!
Sincerely, Richard On Thu, Aug 2, 2018 at 3:04 PM, Alex Hillman <[email protected]> wrote: > Hey Heather, > > Let's start by putting my bias out front: I'll do almost anything to avoid > having an "investor" involved, because I place a very high value on > control. And not because I'm a control freak...but because I've learned the > value/importance of being able to make long term decisions in this > business. Investors are essentially business partners that don't work on > the business every day. > > With that in mind, I also view business partnerships like marriages - in > fact, they're often *more* difficult to undo than a marriage. Bringing on > an investor is like marrying for money. It happens, but it *usually* > doesn't end well. > > I've been where you are, though. Nearly no cash. Banks didn't want to talk > to me. Here's what we have done, and had a lot of success with: > > *1 - Membership drives. *Turn "early signups" into an event. Get your > on-board members in the same room as your prospective members and make THAT > the day that people sign up. Taking checks in person helps you avoid > payment fees (which add up!) but also the collective energy of people > signing up can be contagious. Make it a celebration. > > *2 - "IRL" crowdfunding. *The biggest mistake I see people make with > crowdfunding is getting caught up in the "crowd" and forgetting what each > individual is actually contributing towards, and why. > > Stuff like Indiegogo and such makes it easier for a wider audience to > discover a project but coworking spaces are generally hyperlocal efforts, > so the amount of work that goes into a typical crowdfund campaign (which is > a LOT) spreads that effort thin. One of the most important lessons I've > learned from all of the funding work I've done is that the more specific of > a "thing" you can offer people to contribute towards helping, the better. > > For example....break that $50k into its component parts. *"We need $5k > for chairs" *can turn into "become our official chair sponsor" for a > local business who wants to contribute or, even better, *"buy one chair > and we'll dedicate it to you" *and offer it to members, supporters, and > other local businesses. > > *3 - Member loans. *The first time we expanded we needed a similar > ~$50,000. We shared exactly what we needed it for, and our current > potential options for closing that shortfall. After the meeting, a member > approached helping us - their business had been doing very well (largely in > part because of our community) and they saw this as a way to give back. In > fact, they really wanted to buy in as an investor. > > But again, even though I had a good relationship with this person, I had > to ask myself if I wanted them to be my PARTNER if the money wasn't > involved, and it wasn't a hell yes. > > So I said "what about a loan?" and he said yes. We put together terms > where we had 12 months before we had to start paying back the loan. He gave > me a rate that was better than I could get with a bank, and I had the > flexibility down the road if needed. The only challenge we ran into with > this deal was a sense of entitlement that came with one person loaning us > such a large amount of money, he tried to occasionally hold it over our > heads. It took a lot to keep that from affecting my decisions (and imagine > if he was an actual PARTNER). > > The next time we needed an influx of cash, we went back to the community > and said *"before we go to other sources we're wondering if anybody would > be willing/able to offer us a small loan? We're looking for a few people > who can loan us $5k-10k each."* This approach meant that no single person > could hold the loan over our heads, and in a worst case scenario we could > accelerate paying that person back if they did (so they had nothing left to > hold over us). > > The best part about these smaller loans was that we were able to turn > these into *zero interest *loans. They had the same "1 year before > payback begins" term, but we also talked with each member about the actual > interest they were going to earn at market rate on such a relatively small > loan. We said "here's the dollar amount - but maybe there is something else > that's similarly or more valuable to you than the interest?" and in every > instance we were able to offer something with nearly no cost (membership > credits, consulting/support, public gratitude, etc) instead of paying the > interest. > > *4 - Don't buy everything at once. *This one is the most often > overlooked. > > Your job isn't to fill a space with stuff. It's not even to fill a space > with people. Your job is to bring people together. > > SO YOU DON'T NEED TO BUY EVERYTHING AT ONCE. > > When we opened we didn't have... > > - a coffee machine > - a couch > - whiteboards > - a printer > - a projector and screen > - dishes or mugs > > Since we've never competed on "having stuff" we made it clear that we'd > buy stuff that was a) most important, b) as soon as we could afford it. > Want Indy Hall to have something faster? Help us recruit more members! Help > us find or negotiate a deal! > > we didn't have chairs for every desk. we didn't even have the number of > desks that our space could hold....we just had enough for the people who > were there, and a few to grow into! > > I think because a lot of people who want to open coworking spaces spend a > TON of time looking at what other coworking spaces do, there's this > misconception that you have to have it all on the day your doors open. > > And if you think "yeah Alex that worked in 2006 when you didn't have any > competition..." guess what we've done every time we've moved, or expanded? > *the > exact same thing*. > > I'd take a good hard look at the things you think you need that $50k and > decide what you REALLY need....and what you can buy down the road once > you've built up your membership. > > *LASTLY.....INVESTORS ARE YOUR LAST RESORT. * > > I'd rather not open a coworking space than give up control over how I > serve my community. It's one of the biggest things that's allowed us to > thrive for over a decade, and I wouldn't trade it for anything. > > -Alex > > > ------------------ > *The #1 mistake in community building is doing it by yourself.* > Better Coworkers: http://indyhall.org > Weekly Coworking Tips: http://coworkingweekly.com > My Audiobook: https://theindyhallway.com/ten > > > On Wed, Jul 18, 2018 at 8:20 AM Heather Miller <[email protected]> wrote: > >> Hey all! I am in the process of opening a coworking space specifically >> designed for uplifting and sustaining creative professionals' careers. I'm >> so glad I found this channel, as it's a great sounding board for some >> consistent questions I've been having. Plus, I can see that a lot of our >> ideas have already been replicated elsewhere, so I'm excited to learn how >> others have done it before us! >> >> We have a fantastic space ready to go, and everyone is on board with it, >> however we are going to need some starting capital to finish up some of the >> construction. Our landlord (the building owner) has already worked out a >> deal with us to finish 1/3 of 5000sq ft space, with the last 1/3 being our >> responsibility. We are estimating the construction costs to be around >> $15k-$20k, and then we'll have to pay for the furnishing after that as >> well. Overall, we're looking at needing probably $50,000 or more to furnish >> all of that area... We're planning on doing a crowdfund, but are still >> expecting to be short. :( >> >> Does anyone have any experience in asking investors or companies for >> sponsorships of any kind? I have no idea where to start, what to ask, or >> where to find people that would be interested in investing money of that >> kind. >> >> Any good resources or advice? >> >> Much appreciated! >> >> -- >> You received this message because you are subscribed to the Google Groups >> "Coworking" group. >> To unsubscribe from this group and stop receiving emails from it, send an >> email to [email protected]. >> For more options, visit https://groups.google.com/d/optout. >> > -- > You received this message because you are subscribed to the Google Groups > "Coworking" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > For more options, visit https://groups.google.com/d/optout. > -- Richard Stuart *Ten Below Coworking* p: (218) 464-9724 w: 10belowcoworking.org e: [email protected] <https://www.facebook.com/10belowcoworking/> <https://twitter.com/10belowcoworkin> <https://www.linkedin.com/company/10-below-coworking/> <https://www.instagram.com/10belowcoworking/> -- You received this message because you are subscribed to the Google Groups "Coworking" group. 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