Ask HN: Hosting for equity?

[da288]

Hi,

I have a fully working web startup that I want to launch - the cost will be primarily image hosting and while I'm reaching out to Angel Investors (London is getting better but still pretty tough), I was wondering how reasonable an equity for hosting offer would be. I presume most major startups have extra capacity left over after setting aside excess to take up variable demand slack. Do you think this is a feasible model... it would be a different way to value the company, but I can see it as a win-win for the hosting providers. Any thoughts? Thanks.

[patio11]

This question strikes me as similar to giving away equity for office supplies. I suppose, theoretically speaking, one could come up with a way to structure a deal with Staples such that you bought your copy paper with equity... but why. Image hosting is a cheap, commodity service like office paper. Go raid your coffee tin, that should suffice for several months.

[steveklabnik]

Especially if the primary need is image hosting. S3's 14 cents/gigabyte isn't cheap enough?

[pmjordan]

And if for some reason Amazon isn't suitable, you can get dedicated servers seriously cheaply these days too, e.g.

http://www.hetzner.de/en/hosting/produktmatrix/rootserver-pr...

(no affiliation, I'm just a happy customer)

[dstein]

Never give away equity (future profit) for a utility. You should have learned this in Parker Brother's Monopoly.

[ari_]

Note: A Fully working web startup that you want to launch is not a fully working web startup.

What about S3 or a bunch of VPSes to test the idea and then go to the Investors with a working startup?

[fleitz]

Sure, send over the business plan, I'll look it over and it if looks profitable I'll let you use my S3 account for 50% of the company.

[da288]

Thanks, but sarcasm aside, I was going on the premise of a far smaller share (<5%) for an innovative technology. I can see what everyone is saying though, seems like a bad idea. I'll just keep trying to flog it to investors.

[fleitz]

Also, S3 has a free tier now, and figure out how to leverage GAE's (Google APp Engine) free tier. Seriously, it's difficult to figure out how to do things for free, but just do it. ALSO, dreamhost has plans for about $8/month with 'unlimited' storage, yes you'll eventually get booted, but if you can get traction you'll have all the money you need.

And put your email in your profile so people can get in touch with you.

Email me if you want more ideas on free or almost free storage. (It's in my profile)

[dan_manges]

What about cash for equity and then use the cash to pay for hosting?

[pmjordan]

I think "I'm reaching out to Angel Investors" is intended to mean he/she's trying but thus far hasn't been able to raise money.