#9 The Money
This series is about what I’m learning, observing and experiencing while building my startup Saent (pronounce “Saint”). The good, the bad and especially the ugly, each time in under 500 words.
You start with some mails back and forth. You sign an NDA and send over a deck. You meet for the first time and have coffee. You send over some more detailed plans, perhaps a first forecast. You meet again, this time over dinner and drinks. There are questions which need to be answered: more forecasts, more detailed plans.
Then, more dinner and more drinks. You send over more stuff and then finally, after weeks or even months of going through this…
The investment falls through.
You can’t agree on the company valuation.
Someone gets cold feet because the proposition is too risky.
The proposal gets changed, because it has become clear you have cashflow issues.
I’m not sure about you, but that’s what raising investment looked like for me during my previous pursuit. It was painful, a waste of time and I swore to myself I would never do it again.
With Saent, things would be different.
We’ll limp to a Kickstarter on:
- My last savings.
- Russell’s willingness to work for future profit.
- Money I would make on the side, giving productivity trainings.
Then we’ll have an amazing launch, instantly become profitable and investors will come to us!
Well, maybe, but while I was staggering along on this route, I saw a trap closing, which I had fallen into before: losing focus.
What I believe in most, is the potential for a technology company around productivity. But to bring in money to eat, I also have to develop and give time-management trainings.
Guess what? Paying customers always get priority. Soon enough, I started neglecting the product-side and spending more and more time on my trainings. I was more or less aware of this, but hey, I need to eat, so what can I do?
Seemingly struck by lightning, I knew instantly what to do.
A potential investor happened to be in town. Someone I’ve known for many years and had invested in some of my previous undertakings. He had already kept an eye on Saent and told me he liked it, so we scheduled a meeting.
No slides, no forecasts, no tough negotiations.
We just talked for two hours and it was done: 100,000 euros for 10% shares, exactly what I had hoped for.
Whether that’s a good deal or a bad deal and for whom, we’ll find out later. My goal was accomplished and at record speed: I could start focussing 100% on developing our product and the whole ordeal took only five days from start to finish!