I am the technical founder of a 4-years-old startup. After two rounds of funding with small European VCs, some very good customers (government agencies, big retail customer, ...), a unique product and a Cool Vendor award (Gartner), we are running low on cash and entering into a vicious circle: expenses have been stopped, R&D team reduced, ...
In our situation, doing a third round of funding with VCs or selling the company/product is difficult because we are not in a good position to negotiate.
An alternative would be to open-source the product and switch to a new business model. We can either earn money from dual-licensing the code, from support contracts or from paid developments. To do the switch and guarantee the future of the product, we still need to raise some money to continue the investments.
Is crowd-funding a good solution to finance the open-sourcing of a proprietary product? We will need between 500K€ to 1M€. The community will benefit from this release and top buyers can be given some advantages: free support hours, resellers advertised on our website, ...
Has it already been done?
If not a viable solution, what are the alternatives to finance the open-sourcing?
