Obtaining Funding. Help Wanted!

[keepTheDreamAlive]

Hi all,

I'm attempting to set up a pay-per-click advertising service. The product is finished and has been put online for live public beta testing, which was successful.
I had a lot of positive feedback and made some changes around the negative.

One problem I encountered during the beta test however was that towards the end I started to receive far more traffic than I could handle (my adserver was displaying around 600k ads per day and tracking each of these views and clicks geographically.)
I had completely underestimated the amount of load this traffic would place on the server and it's become clear that I need to upgrade, I'm currently shelling out £110 per month for a dedicated server which I'm able to pay for with earnings from my day job... the upgrade though is going to take this up to £600-700 per month.
The problem? I'm 19 and working in an entry-level office job earning on average £1000 per month... I can't afford £600-700 to pay for servers.

The solution I'm guessing is finance however last year I stupidly got myself into some debt (just over £3k worth) and was served with 2 default notices, this has all been settled now and I'm debt free aside from credit obligations such as rent, mobile phone contract & car loan but I can see this making it difficult for me to obtain credit, especially as being 19 I have no PG; there is still finance on my car, I live in rented accomodation and I don't have any assets that a loan could be secured against and the business doesn't have any tangible assets either.

The money I earn from my day job only gets me by from day-to-day - the little disposable income I had left is paying for the current server. I'm also studying Law (LLB Hons) at the Open University which is costing me £2k~/year in tuition fees. My mum is a lone parent and doesn't have the spare cash to help me out at the moment and isn't in a position to take on credit due to having to remortgage the house at the end of this year (5 year mortage deal with Northern Rock expires this year and as we all know they've gone into administration.)

I set the company up in August 2010 as a limited company, currently I'm the sole director and only employee.
I have worked on this project myself for 6months and it's frustrating that I now can't take it anywhere even though it's more or less ready to launch.

If anyone has any ideas about how I can move forward with this I'd be happy to hear them.

Kind Regards,

kTDA.

[fundingportal]

I have no comprehension of the viability of your business model - I'm sure someone will soon be along who can comment on that.

Borrowing money is a non-starter, so how about you take on a bbusiness partner/shareholder who can inject a sum of money.

Frankly, if you have any friends in the IT sector they might be willing to take a punt on investment without digging too deep.

Incidentally, Norther Rock aren't in administration, they are owned by SOLICITOR FOR THE AFFAIRS OF HER MAJESTY'S TREASURY - soon to be sold - and are trading quite successfully, so might simply renew the mortgage.

[keepTheDreamAlive]

Hi fundingportal,

Thanks for your input.

I guess I'm not all that knowledgeable when it comes to taking on a partner/shareholder, where do I find someone? How should I pitch to them? The same way I would a bank? Is it acceptable to advertise for such a thing but state that they would need to inject a chunk of their own capital? If so, how are those ads generally received? Are they successful?

Ah ok I wasn't sure of the exact situation with NR but thanks for clearing that up, I don't know if it's by choice or by force mum is changing mortage company at the end of the 5 year deal but that's her decision :P

[arcon5]

What exactly is it your doing?

Are advertisers using YOUR ppc services and your distributing them ads?

How does this business generate revenue?

How much memory/bandwidth/disk space are you using to require about 6 dedicated servers?

[Alan R Price]

I agree with fundingportal - you need an outside investor. To do this you need a business plan and some trading forecasts. Look at the Business Link website: http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073869162.

It will then be a question of finding an investor, which is the challenge. Google it - look for start-up capital and business start-ups; go round your family; get yourself a part-time job to subsidise your lifestyle. It will be hard work but you seem to have a good product, so it should be worth it.

[othellotech]

started to receive far more traffic than I could handle (my adserver was displaying around 600k ads per day and tracking each of these views and clicks geographically.)
I had completely underestimated the amount of load this traffic would place on the server and it's become clear that I need to upgrade, I'm currently shelling out £110 per month for a dedicated server which I'm able to pay for with earnings from my day job... the upgrade though is going to take this up to £600-700 per month.

I still think you're massively underestimating the load that serving the adverts will take, and you'll need to budget for a *lot* more than £700/m on servers to handle the stats/tracking/etc

Even assuming 0.1p/ad towards the service cost 600,000ads/day would be £18k/month towards the systems ...

[charliemi]

Hi all,

[...]

Kind Regards,

kTDA.


Have you looked at using Amazon Cloud hosting services rather than Rackspace style contracts?

Are you a Commission Junction style platform or are you purchasing the advertising on behalf of another party and paying for it in advance? Can you post a link to your website?