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I hope making this confession will make me feel better. Apologies for the length.

I started a startup in 2007 and convinced a very close friend to join me. We raised about $25,000 from F&F, left New York and moved to Silicon Valley because "that's what you do", right?

We rented a $900/mth flat in San Jose and settled in. The plan was to attend meetups, promote our product, meet VCs and hopefully raise more funding.

Our first VC pitch fell flat because we had no traction. I went back to the drawing board and fell into the killer feature trap. Feature and feature went into the product, month after month went past, and we burned our meagre cash.

We ran out of money. My co-founder went back to his day job but I decided I had to keep working. If anything, to pay my mum back her $10000.

I've finally got the product right, new business model and a few clients, including a subsidiary of AOL.

Here is the problem. Nobody knows that I run the company by myself. Just me, using multiple emails and aliases, doing customer service, marketing, tech support, software development etc.

I'm tired of doing so. I need more people but the company can't afford people yet. My friends are all in day jobs, trying to pay their bills so I can't ask them to contribute more than a couple of hours a week or the normal "can you give me a 2nd opinion on this design" question.

I read yesterday that Omar Hamoui (AdMob's CEO) was a one-man company when he got funded by Sequoia. I wish I could be open about being a one man company but I'm worried I may put people off.

Any advice?

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Wow! That's the first of those we have in Startups.com! Is your company making money? Nevertheless, what you are doing is commendable – Fred Imparatta Nov 11 at 23:34
I won't quite call it making money. It is just enough to pay for servers. The really big clients are still pilot testing it so fingers crossd. – Alex Nov 11 at 23:49
Still, you're the one-man-band in Startups.com, amazing work! – Fred Imparatta Nov 11 at 23:50
Dude, it's crazy. I hate pretending but I feel I have to do it for anyone to take me seriously. Sometimes I wish I was back in college. Perhaps I would have found additional help more easily. 10 years on and everyone has "responsibilities". – Alex Nov 11 at 23:57
As a contractor I'm a one-man company. That's not so unusual. – adsbringcustomers Nov 12 at 0:47

15 Answers

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Nothing will turn away VCs like fraud. Pretending to have more staff then you do, especially with fake email addresses, is one of those things that will lead to "If he's lying about the staff, what else is he lying about?"

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Dude, give a guy a break. It wasn't planned this way. It sorta happened. Call it a survival instinct. A lot of people do it and don't talk about it. At least I'm trying to find a way out. – Alex Nov 12 at 1:49
Just a warning. I am someone that had participated in startups, and am frequently hired by VC and investors to perform Due Diligence on startups or investment opportunities. If something like this popped up it would be a big Red Flag for the investors. They would HAVE to wonder if the numbers are fudged also, if the contracts are real, etc. Also it could bring in actual legal complications. Depending on the investment types, the SEC could get involved and prosecute Federally, it's happened. Clean up now and try to go strait for awhile. – Steelsun Nov 12 at 15:14
Thanks Steelsun. I will heed your advice. – Alex Nov 12 at 15:40
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student interns? for development and cust. support?

pile up the business plan, supporting materials and hit banks, social networking, partners, investors.

i think you already gained respect, by keeping on doing it and going right at it and sticking to it.

you need that dough, got to get those investors, got to communicate your goals and purposes.

good luck.

GOT TO GOT TO SELL YOUR IDEAS, you don't know how to? try, learn, experiment, if you got that far as is, you just might get farther by expending your sales pitch and mastering it.

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Thanks for the suggestions. Employing student interns sounds like a good idea. I've never really thought about it that way. I'm doing 20% software development now, 80% marketing. Down from 95% software development only a few months ago. – Alex Nov 12 at 1:47
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Why in earth would you want to give the impression that you have more staff than you can afford? That would be a big turn-off for me as a VC. You really should think hard about what your motivation really is to lie about that.

To me it sounds like the small-town boy in the big city working as an asst secretary mailing home to his folks bragging about his VP job.

Don't be ashamed for having an organization that fits your sales!

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I'm going to stop it. It kinda happened as a survival tactic. One pseudonym turned into two and it just perpetuated itself. I want to turn it around but I've still got this niggling fear that i won't be able to sell it. How do I get out of this jam? – Alex Nov 12 at 2:01
This would be a problem if you work with the very people that you have "lied" to. Otherwise, just silently (and gradually?) remove the aliases. It's hard to give you any more concrete advice without knowing your situation in detail, but I don't envy you. If confronted, however, be frank, and explain why you felt yourself being forced to act that way. – Zano Nov 12 at 2:26
Thanks for the advice. – Alex Nov 12 at 2:32
No prob, and good luck. (and don't be afraid to upvote the good answers you got for your question ;-) – Zano 0 secs ago – Zano Nov 12 at 2:36
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although I agree that trying to fool VCs is completely wrong, one-man shows can be seen by client amateurish depending on service provided.

But if I were VC or AI I would really appreciate one-man shows.

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Hi, I'm not trying to fool VCs. It was just something I did in a desperate attempt to gain traction. It is very frustrating to be "passed over" because you are a one-man company. I panicked and did what I thought will help me compete. In hindsight, I wish I had other options. – Alex Nov 12 at 11:05
I had mentioned fooling generally not particulary about you. My apologies if any offence. As I stated before, I really appreciate one-man shows. – CoreRepublican Nov 12 at 11:35
No offence taken bro. I appreciate the advice you and others have given me. – Alex Nov 12 at 12:26
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You remind me of myself in many ways. I can see myself in your shoes later down the road as well. Being in control is good at first, as it cuts costs and other headaches, but while your company expands you need to hire others to take the weight off of your back to remain productive enough to actually handle the expansion. If that's still not possible you just have to find alternative means to getting certain tasks done more efficiently in order to remain stable while seeking additional investments (or to sell the company).

At this point, you need to do whatever keeps your company afloat, as you're doing, assuming nothing you are doing can get you into legal trouble later on. There is nothing wrong, or off-putting, with playing several roles - in my eyes that displays talent, hard work, passion, and dedication. The only confliction I see is when you are assigning these roles life-like identities/aliases. Clean that part up and you should be fine.

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Thanks for the kind words. I'm going to clean things up. It won't be hard since these aliases are only used in emails. My main worry is - once I've cleaned things up, won't I be back to square 1 i.e. facing rejection for being and appearing as a one-man show – Alex Nov 12 at 12:25
In my opinion, I don't see an issue with how you're running things, so long as the operation is stable, and you have all of your ducks in a row. If you're still having trouble sleeping at night, what you may need is some guidance and wisdom from one who's been down the same path and can pinpoint anything which may be of concern, that you may be overlooking. This would also comfort you more when approaching others about your business. Here's an interview with Omar that may be beneficial youtube.com/watch?v=McYMkuHHwiU – zatrigo Nov 12 at 13:50
I saw that video interview yesterday. That was what prompted me to "come out" with my problem. I was surprised that the VCs funded him as a one-man company. Everywhere you go, people say you must have a co-founder, and that VCs only invest in teams. I was surprised that he went against the rule. I wonder what his secret sauce was. – Alex Nov 12 at 15:44
I believe that his commitment to the product is what got him funded. Plus the undeniable fact that his business was going to hit the roof after getting funded. Be confident in your product and a bit of that will rub off onto these VCs when you speak with them. Remember, doubt is subjective, so don't let it take the reins. However, after speaking with several VCs and you find it impossible to get your foot in the door, you then may want to seek a new partner, or at least try a different approach, based on their feedback. – zatrigo Nov 13 at 2:18
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Alex,

There is not one small company out there that does not pretend to be larger than it is when trying to sell large customers. It is okay to talk to customers and advise them that you are a small company. Most large companies will understand this but would want to know how you will support them if they give you a large chunk of business. I think by using "fake names" it will hurt more than you think as a large customer starts to do more due diligence. I work for a startup that is small and sells to very large customers. The best way that we have avoided the pitfalls of being labeled "unstable" is by first declaring we are nimble and flexible to the customer and most importantly having some partners that will provide support to these large customer once they are on board. If you truly have large customer piloting and testing the software start talking to partners with the view that you are working on a few large deals for your service and would want to understand what they could provide. You may be surprised that they may even want to collaborate with you.

If your need is really getting commission based marketers than it makes sense to talk to a small company that is symbiotic with your business and start talking to them about joint marketing. This will only be stop gap and eventually you will still have to spend money to make money. But it may help bring in some revenue to invest in your business.

You may also want to check out SCORE...they have senior executives that volunteer time for small business...you may be able to build a small network through them that may help in providing advice and guidance.

If there is specific type of expansion help then you may want to post your requirements for that here beyond just stating that you are trying to act like you are bigger than you actually are and that friends are not reliable to fill positions. Some of the posters here my be able to help point you to a specific resource that may help in the marketing side if we knew what your product did....

Here are some ideas on finding partners:

The goal is to find a partner in your sandbox that does not have your product. Sometime it may help to find out other companies your current large customers are already working with. And approach them. A warm handshake is always the best but if you dont have that then cold call it is or maybe cold email....

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You can get virtual employees.

http://www.virtualemployee.com/

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Thanks for the link. Unfortunately, my immediate need is for direct marketers who are based physically in the US. – Alex Nov 12 at 1:42
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Maybe start looking for partners ... someone that you can give a stake in the company in exchange for them getting some of the pressure off of you. If you're not spending all your time doing support and administration stuff, you can focus on growing your company ;-)

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How do I find these partners? Most of my close friends are not available for full time work, and some would argue I shouldn't even be trying to hire my friends. – Alex Nov 12 at 2:38
Networking ... user group meetings, I'm sure your friends have friends that you don't know. – Joel Martinez Nov 12 at 14:14
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Give the guy a break. Who has never lied before? At least he's confessing. I want to hear more

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in my opinion its not such a bad idea to have imaginary staff. it sort of reminds me of an idea outlined in the book eMyth by Michael Gerber. The idea is that essentially a business with 1 employee needs to perform the same things as a business with more employees. so it is suggested to create a positions (roles) within the company and assign the duties and responsibilities to it and do it all yourself. trying to polish, restructure and make roles working efficiently in the business. then as the money start coming in you hire employees for the individual roles.

so in my opinion you're doing it right. just the attitude is wrong. its not about pretending to be big but preparing for the future growth and bring some organization and sanity to the business.

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Most often lies, even little white lies, get found out in the end. What happens when someone asks for a meeting with "Susan" from customer service? Is she going to be "busy" or "home sick" all the time?

I understand the motivation of thinking you look more professional with multiple employees, but my guess is that it will eventually blow up in your face. If that happens, you will get a reputation for being untrustworthy and that could easily ruin everything you have worked so hard to achieve.

Go have a one-on-one talk with your most trusted customers and see if they are not impressed that you have been running the show on your own all this time? I realize that you could lose some customers, but that's better than getting known as a dishonest businessman and lose them all.

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Hi Alex contact me at khalil.adel at gmail, i could help.

Thanks. Adel.

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I second the idea of students. You could contact schools that teach Masters programs in the whatever areas you need help in. I know that as a student I was thrilled to be paid $13 per hour. The school was paying only $9-10 if you found work on campus. Now if it also sounds good on a resume (i.e pretty sounding job title) that's even better!

The only thing about students is that during school year you'd have to be flexible in terms of schedule or let them do it online if possible. But overall I'd say students are a great source of very qualified and extremely cheap labor.

Also if your company continues to do well and you like the people you end up working with, they might transition to being full time employees once they graduate. You'd be training future staff =)

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Get rid of the fake names immediately.

It's fine to use generic names for email aliases, such as sales@newco.com or support@newco.com. Eventually, you're going to have others handle those functions, as ondrobaco mentioned about The E-Myth book.

You've gotten over the product development hump now that you said you're at 80% marketing, so hopefully sales will start coming in that can support additional low-cost, part-time employees. VCs want to see success, so you'll have to get those sales anyway before you'll get capital.

Keep cranking that flywheel!

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You are working hard and following your dream. I dont think you should use fake life-like names. Be what you are. Dont be in a mad rush to be bought out by a VC.

I myself have a similar thing. While I have collaborated and tried to build a network of support around me, its hard to get people to have committment at the same level as the founder. This takes time.

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