The seed funding round for FinderBase was finally launched yesterday. Most of my active readers have received the investor letter. If you haven’t but would like to see it, just contact me directly.
So it all comes down to this.
Due to the tight schedule of this project, the funding round will be closed already next Monday at 4 pm Finnish time. This weekend is the Midsummer so I bet people have better things to worry about than our investment round.
At this point we have about 20,000 € worth of commitments to invest so we’re at least 80,000 € short to make this happen. It all comes down to the last day of my project on Monday. However, if we do get investments during the weekend, I’m happy to report the updated status here.
To get this project to its goal, we need to see if we have been able to create measurable value in the eyes of investors. With investors I mean anyone who has some money and wants to put it to a good cause.
According to the recent poll, there are at least 34 people who are interested in hearing our investment proposal. So if you want to receive the FinderBase investor brochure, please leave your contact information to this
I have been now writing this blog for 100 days. There have been ups and downs but my project is still standing.
But where is the money?
For some weird reason people keep asking me this. To show where the money is, I’ll quote my favorite professor Pier A. Abetti:
Think of companies like pizzas. Your startup is a whole mini pizza that you own. When you sell a part of it, the pizza becomes bigger. Would you rather own a whole mini pizza or a slice of the bigger pizza?
The lesson here is that the small slice of a bigger company tends to be worth more than the whole smaller company.
So the plan is this:
We have founded a company FinderBase Oyj that owns the FinderBase.com service.
We will arrange an issue of shares for FinderBase Oyj.
We will offer the shares to people who trust us and want to be a part in building a big phenomenon.
This will dilute our own ownership but will grow the company.
Would you be interested in getting our investor brochure?
Now that we’ve taken things a few steps further, it’s time for a status update.
We have founded a company, so now all we need is its valuation.
FinderBase Corporation is a public limited company with 8,000,000 shares. I’m the majority shareholder with 5,500,000 shares. I’ve spent 55,000 € of my own savings to buy these shares so my project is on the negative side with the same amount (plus some peanuts to go with it).
My challenge was to make my personal ownership worth $1,000,000. This adds up to $1,073,000 as the investment must be also covered. This means that I’ve successfully completed my project if we issue a credible number of shares to an external investor at a price of $0.20/share or 0.15 €/share.
It remains to be seen whether that is the correct price per share in our company.
Today, I met a man who wants to be a business angel. He has made his money playing Internet poker and aims to retire as a business angel. He will fail.
Why are most business angels experienced entrepreneurs?
It’s easy for people to think that being a business angel is all about the money. I will argue that it is in fact everything but the money.
First of all, money is just money. Money has never done any work by itself. In wise hands, money can work for you. In foolish hands, it can work against you. A good business angel can tell from experience whether the entrepreneurial team can use the money or not.
Secondly, if the team has a great idea why would they need an angel? Let’s assume an idea is so simple that the entrepreneurs themselves understand what they are doing. Why would they exchange a part of that fortune for money?
In real world, only the people with bad to mediocre ideas contact the business angels in search of money. The business angel is an expert in spotting the best of the bunch.
Who is qualified to invest in your ideas?
I’ve said openly that I will be looking for a business angel to invest in my ideas and my team through the end of this project. But the dilemma is here:
The ideas get constantly better when developed with people.
Making the ideas happen doesn’t really need that much money when you already have the people who believe in them.
The investors should have an increasing amount of knowledge to really contribute to the things we do.
But even so, the thought of getting a real business angel interested in what we do is fascinating.
I spent some time today to present my first subproject (the one I pitched last week) to the Tuli people. After a fair bit of discussion I’m quite positive that we’re getting the first funding to get things rolling!
In the first stage we’re talking about 5000 € (less than $7000) that can only be spent on goods and services that directly support the project. That is exactly what I’m going to do. I will launch an alpha version of a social media web service in about a month from now. I presented some people I need to get it done in my entry on Day 11.