Of course, a bank would not be interested in this; only an investor with a willingness to take a risk and some confidence in the endeavor. That is who we are talking about. I'm asking about what %annual interest is typical for an unsecured loan from such a seed investor.
We're not talking about stock because we don't have current plans to sell or go public, so stock wouldn't make sense from an investment perspective. I'm sure there have been other start ups who have been in a similar place; I'm wondering how they set it up.
We're currently looking to take a seed loan in the amount of 10-15k, probably from someone we know, to bring us through the next 6 months of alpha development.First question: For this kind of (high-risk, IT start-up) loan, what's a reasonable interest rate? Any considerations on how this is typically set up? What should we take into account in negotiating it?Second question: How much of a...
We're at the stage of putting together our financial projections and preparing to pitch for loans from a few potential investors. We're thinking something in the range of 10k-20k, to take us through the next 6-8 months of building up to open beta and starting to bring in some revenue.