[alexc93]

Originally Posted by paradoxical3

You bet your ass they are. And not for your company, either.

I lost $200k going to China. Don't make the same mistakes I did.

I have filed for international patents in a couple regions (which are pending) but I really have no idea how much that truly protects us against China ripping it off...I imagine it really doesn't protect anything considering the legal systems are so different. I assume it's more a nice thing to be able to say you have than anything.

[MrRoboto]

Debt is cheaper then equity. for only $100k try to get early stage loans from friends and family. Or perhaps get a line of credit with your bank.

[qba335i]

Originally Posted by MrRoboto

Debt is cheaper then equity. for only $100k try to get early stage loans from friends and family. Or perhaps get a line of credit with your bank.

+1

My brother is in the early stages of his start up and basically got all the funding from my parents and some grants.
He met with some investors, but with no cash flow / revenue (and high risk) they were either not interested or wanted a substantial equity share.

[paradoxical3]

I just want to re-emphasize how dangerous going to China is if this is your first time manufacturing a product. You don't know the ropes yet and you will get taken advantage of. If you successfully raise investor money you will be held accountable to them, and you cannot afford to make a mistake that will erode your capital runway.

Some advantages for staying in the US:

1. Drastically reduced lead time. On the order of months. For example, if you use injection molding you need to get your first shots to approve. They always need fixing. Every time you go back and forth on a revision, you have to pay for expedited international shipping. This adds weeks alone.

2. If you are in the US, you can approve things immediately and be present as they come off the line. I had a batch of product come in from China that was specced to be 12.1in in width. They came in at 11.96, making them unusable. I had no recourse against the manufacturer.

3. They promise anything to get your business, and then don't even try to live up to the promises.

4. They will "improve" your process without notifying you. They are trying to save you money (as well as themselves) but do not understand why certain critical processes are done a certain way. This will cost you money and time fixing.

5. If they get a larger order, they will not think twice about shoving you aside, regardless of your contract.

6. Accountability. If you are in the US and someone screws up, you can drive or hop on a flight and settle it that same day. If you are in China, they ignore you because they know you will never find them and are too far along in the process to switch manufacturers.

I could go on and on and on. But I have found that domestic pricing is now so close to China for most things that it actually makes me money staying in the US for all assembly and manufacturing operations. I still order bulk components from China but other than that, stay domestic and do yourself a favor.

[paradoxical3]

Originally Posted by alexc93

Have been very close to going a kickstarter route, however kickstarter takes 5% of total raise, plus 3% for transaction fees at the end so essentially i'd be left with $92k, which granted I could just raise my ask for the funding to balance this out.

I agree, the publicity and response you get from doing the campaigns is almost as valuable as raising the money itself.

After already putting a decent chunk of money into this myself, I'm pretty much dried up until funding comes in.

Thanks for the advice!

You are missing the big picture. Who cares how much money you are left with from kickstarter.

Your problem now is that you have no sales. When you meet with investors, you have no proof people want your product.

If you sell 1000 products on kickstarter, not only do you have sales, you have sales that prove a demand large enough that people will risk pre-ordering a product that does not yet exist in order to get one.

That is how you raise capital in this day and age.

[alexc93]

Originally Posted by paradoxical3

I just want to re-emphasize how dangerous going to China is if this is your first time manufacturing a product. You don't know the ropes yet and you will get taken advantage of. If you successfully raise investor money you will be held accountable to them, and you cannot afford to make a mistake that will erode your capital runway.

Some advantages for staying in the US:

1. Drastically reduced lead time. On the order of months. For example, if you use injection molding you need to get your first shots to approve. They always need fixing. Every time you go back and forth on a revision, you have to pay for expedited international shipping. This adds weeks alone.

2. If you are in the US, you can approve things immediately and be present as they come off the line. I had a batch of product come in from China that was specced to be 12.1in in width. They came in at 11.96, making them unusable. I had no recourse against the manufacturer.

3. They promise anything to get your business, and then don't even try to live up to the promises.

4. They will "improve" your process without notifying you. They are trying to save you money (as well as themselves) but do not understand why certain critical processes are done a certain way. This will cost you money and time fixing.

5. If they get a larger order, they will not think twice about shoving you aside, regardless of your contract.

6. Accountability. If you are in the US and someone screws up, you can drive or hop on a flight and settle it that same day. If you are in China, they ignore you because they know you will never find them and are too far along in the process to switch manufacturers.

I could go on and on and on. But I have found that domestic pricing is now so close to China for most things that it actually makes me money staying in the US for all assembly and manufacturing operations. I still order bulk components from China but other than that, stay domestic and do yourself a favor.

These are all really helpful points, thanks very much paradoxical3.

I suppose certain parts could be manufactured in china and assembled in the US as a couple of the electronic components such as batteries, chargers, capacitive sensors etc are pretty generic off the shelf parts.

I appreciate all this advice.

Originally Posted by paradoxical3

You are missing the big picture. Who cares how much money you are left with from kickstarter.

Your problem now is that you have no sales. When you meet with investors, you have no proof people want your product.

If you sell 1000 products on kickstarter, not only do you have sales, you have sales that prove a demand large enough that people will risk pre-ordering a product that does not yet exist in order to get one.

That is how you raise capital in this day and age.

It seems from the last couple of weeks that Kickstarter will be the way to go. A good friend of mine actually just launched his fundable page - feel free to check it out www.fundable.com/checkmatecareers for anyone who wants to take a look.

[gtron]

Originally Posted by alexc93

A good friend of mine actually just launched his fundable page - feel free to check it out www.fundable.com/checkmatecareers for anyone who wants to take a look.

i can't help but feel there's some legal issues with his or her fundable page. i wonder if those companies can go after whatever money (s)he earns from using their registered trademarks.

btw, i wouldn't link yourself to your friend as it represents you now. you will be judged by the page you are recommending. if (s)he looks questionable, so will you.

just some friendly advise. gluck!

[alexc93]

Originally Posted by gtron

i can't help but feel there's some legal issues with his or her fundable page. i wonder if those companies can go after whatever money (s)he earns from using their registered trademarks.

btw, i wouldn't link yourself to your friend as it represents you now. you will be judged by the page you are recommending. if (s)he looks questionable, so will you.

just some friendly advise. gluck!

I have already mentioned that legal point to him since he's using logo's from other businesses but to each his own.

Not necessarily recommending the page, just thought since its on topic people might be interested to look. The concept is interesting.

Thanks!

[MrRoboto]

Originally Posted by paradoxical3

You are missing the big picture. Who cares how much money you are left with from kickstarter.

Your problem now is that you have no sales. When you meet with investors, you have no proof people want your product.

If you sell 1000 products on kickstarter, not only do you have sales, you have sales that prove a demand large enough that people will risk pre-ordering a product that does not yet exist in order to get one.

That is how you raise capital in this day and age.

Well said.

[Xtabi]

Shark Tank

[alexc93]

Originally Posted by Xtabi

Shark Tank

Long story with Shark Tank actually. I was very far along in the application process and cannot discuss due to the hundreds of pages of contracts i signed at the time, but was cut for the current season due to having zero sales. Hopeful to make it to next season as I will get to skip through the application process, and go directly to the producers.

[BwoodBMW]

Originally Posted by alexc93

Long story with Shark Tank actually. I was very far along in the application process and cannot discuss due to the hundreds of pages of contracts i signed at the time, but was cut for the current season due to having zero sales. Hopeful to make it to next season as I will get to skip through the application process, and go directly to the producers.

Back to my first post. Not looking for details but is there something about your wearable that is absolutely for sure 100% unique?

I've been pitched on probably 25-30 wearable tech companies. All of which probably pitched 100 guys like me. The only one I know that actually received funding was a friend of mine that I wouldn't fund... He raised about $600k and shut the doors of his company about 14 months later.
I'm not trying to "crush your entrepreneurial spirit". Just giving you very real feedback that being "another wearable tech" company is a tough thing to be right now. Especially without a working product and paying customers. All of them that pitched me had something sort of unique about them (pet wearables, corporate wellness focus, old people, babies, algorithms to track which workout you are doing, family networking, social networking, better heart rate sensors, sweat analysis sensors, high fashion, low profile... you get the point, I've seen a lot).... to get attention you need to be REALLY unique, which given the number of people pitching wearables is a very tough thing to be. Feel free to PM me high level details if you want feedback on whether or not I"ve seen anybody else try anything similar.

[Xtabi]

Originally Posted by alexc93

Long story with Shark Tank actually. I was very far along in the application process and cannot discuss due to the hundreds of pages of contracts i signed at the time, but was cut for the current season due to having zero sales. Hopeful to make it to next season as I will get to skip through the application process, and go directly to the producers.

Sell your IP to Mr. Wonderful. His deals are solid!