Where to invest $ 5000?


4

Is it possible to start some startup with this money?
If someone have some success stories to share with us it would be more than welcome.

Startup Costs Investing

asked Oct 11 '09 at 02:55
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Vaske
121 points
  • Great question, because lots of people are in this position! – Jason 9 years ago
  • It's possible, when I started my company we had 2 partners. Each put in 5k, total 10k - and since we started our bank balance had never been lower than 5k. So, it's do-able! We didn't have to depend on anyone else though, we sold, consulted, developed, designed... did our own books etc. – Ryan Doom 8 years ago

7 Answers


4

At 5k you have two options:

(1) You need to be a one man show and become profitable very, very quickly (5k is about three or four months of rent, food, etc.)

(2) Have everyone on the team work a day job and contribute on nights and weekends.

Number 2 is the better of the options because you can put that 5k towards business expenses and you know your team is dedicated to the project (note: this is how Firefox started). Unfortunately, you can't hire outside help, so the people you work with have to be very reliable.

Additionally, if you can become "Ramen profitable"* off of 5k, you become much, much more attractive to potential investors. Not only have you proven that your model can make money, you've also shown that you can use capital wisely.

*http://www.paulgraham.com/ramenprofitable.html

answered Oct 11 '09 at 05:38
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Raymond Giorgi
91 points

2

  1. get some projects where you are that can be done via Mechanical Turk
  2. find people in Mechanical Turk who can do it.
  3. repeat 1 to 2 until you get volume
  4. move to odesk.com
answered Oct 11 '09 at 06:27
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User287
164 points

2

Like many of the answers here, it really depends on your situation and the type of startup. If you possess many of the skills needed to run your startup, 5k might be enough. Chances are you'll need to spend more. Plan on taking any money you make and putting it right back into the company. Starting a business online is cheap with the right skills and resources. If you have never written a blog, do not have sales/marketing experience, have never owned or managed a business, and you're not 100% passionate about the company you plan to start, I'll honestly and respectfully advise you to sit on the sidelines and learn more before starting your first venture.

answered Oct 12 '09 at 05:51
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Dlynton
1,057 points

1

I started my debt settlement company with less than 5k. Broke even in 60 days, grew at 30-40% several months after wards, now am at a constant 15% growth rate. But I wouldn't advise it for just anyone with $5k, unless you have the skill set.

Think 5k and under without skills or minimal certification:
Lawn Service
Pool Service
Cleaning Service
Computer Service
Growing Cannabis (where legally allowed of course)

answered Oct 11 '09 at 03:45
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El Gringo Burrito
11 points

1

It doesn't matter how much money you have to begin with... It matters how much work and effort you are willing to put in, and how well you will do in convincing others in following your vision. $5K is not a lot, but it is enough for some equipment, and if you can get people to work for equity, and an investor to put in the rest, then you have a startup.

answered Oct 11 '09 at 03:12
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Ron Ga
2,181 points

1

It depends on the startup capital and operating expenses required by the nature of the startup you are looking to fund.

You might be able to use that to seed-fund a very low-cost operation in an area with low living costs that is focused on largely intangible deliverables; for example, some sort of web application software. Stuff like Amazon EC2, etc. has really pushed down the minimal investment needed to get some kind of boilerplate infrastructure going.

On the other hand, $5000 would be nearly useless to put toward a private space flight venture! :)

answered Oct 11 '09 at 03:17
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Alex Balashov
121 points

1

I've got a rule of thumb of mine regarding any investment, no matter the amount of money.

Invest either in:

a) your profession - if you want to generate money;

b) you health - if you want to preserve money.

What does it mean to invest in your profession?

  • it could be anything - a startup developing a breakthrough innovation in the field or just increasing your own productivity with better equipment and hiring assistants or making a professional web site of you for self-marketing purposes or going through certification process to get some big name certificate on your CV, etc.
Why invest in your profession?
  • because it is something which you understand, you like (hopefully), it already generates you income and you have low cost access to its infrastructures. You have the contacts, you know the players on that market, you know the consumers, etc. In other words - because this is the option of lowest risk for your money in all cases and of quite good opportunity at the same time. Even if your enterprise goes to complete failure you'd always be able to come to your previous job and the difference would be that you'd know something more about it. Your net value as a professional would've increased.
To me, the riskiest thing is to go spend your money on something which you do not understand, even if the potential profit margins is high.

What does it mean to invest in your health?

  • that could be providing five star healthy lifestyle for yourself - eating only organic food, constructing a cancer-proof home, exercising regularly, getting the best ergonomic solutions on your workplace, etc or purchasing health insurance with very high coverage or investing into the R&D of treatments for illnesses you are genetically prone to, etc.
Why invest in your health?
  • because, if we are talking about preserving money you've accumulated, the biggest possible (and certain) drain of money for you in the future is your health. With age you going to be less healthy, not more healthy. Less healthy means not only greater expenditure but also shrinking opportunity to be able to make money at the same rate as before.
answered Sep 14 '13 at 18:41
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Drabsv
36 points

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