Ask HN: Should I take the “sponsorship” deal?

They pay for development, they get branding, but for how long?

The answer might change your thinking. Exclusively theirs forever, less attractive. Exclusively theirs for a year, then no restrictions on what you do next, more attractive. Theirs for 3 years, then you can take it to others who are not their competitors, perhaps less attractive.

It's all in the details.

What about white-labeling? Meaning, you keep the version you have and fork one for them with their branding -- non-exclusive.

Perhaps part of the white-labeled app is bank-specific content in addition to branding (a branch locator, for example).

Take the money, and spend it veeerrrrrrryyyyyy slowwwwly.

I don't have an answer for you, but something to think about is this:

Always consider the background and context of the person who's giving you advice.

They may be smart, successful, and experienced, but they're not immune to bias.

If you're speaking with a YC alum or anyone in the VC world, of course they'll suggest talking to VCs. If you're speaking with someone in the finance/banking industry, of course they'll side with the banking deal.

This includes members of HN, too. Hopefully you're able to take all the advice with a grain of salt and make a decision that you feel is right for you.

Even without knowing the specifics of the deal, or your site/app traffic, I'd have a hard time accepting the deal based on the exclusivity and cash flow issues in dealing with the bank.

If this bank wants exclusivity, I'd ask for a multiple of their offer. If they don't want to pay it, you can easily shop this around as a white-label tool to apply to multiple verticals: banks and lenders, restaurants, travel, education, etc.

And don't forget that you will likely not see a check from any corporate customer for at least 120 days assuming 30 day for contract and 90 day terms.

I'd also look at alternative lending tools like SMB loans, gov grants, and SMB funding focused startups.

The reason startup people are telling you to not do the deal with the bank: banks are large corporations that move extremely slowly. Even going from a verbal agreement to a signed contract may take 6 months. Then getting a check could be another 3 months. Any of those delays could kill you at any time, and the bank couldn't care less. So that's where the real risk is for you: too much imbalance between the two parties of the deal.

That being said, you got to do whatever it takes, so if that's the only way to survive, then sure, do it. Talking to VCs will not be much faster anyway. Angels could help faster probably, if that works for you.

With the caveat that there is no right answer, I can tell you as a mobile advertising guy that your users are unlikely to desert you just because you build in sponsorship. Particularly on Android they have been trained to expect ads in free products, and there are plenty of ways to do it so that it flows with the user experience. What I would recommend is that you don't let the bank completely dictate the UI - rather build in the messaging in a way that you yourself would find acceptable. Feel free to ping me if you'd like advice on the ad units.