Preseed Projects (under edits)
The are the projects that we are advising and/or connecting forward:
- Todoed — A chrome extension.
- Chattodo — An android app
- Math Ed Labs — Read its medium article linked here to know any further.
- Home Stays Of India (HSI) — Google it. We are exploring this with our friend Minakshi who is a partner at
- KomfyStays —
- LawClik — A firm we are looking to lay our mind and connection to, to make a dent in the legal industry.
- eduSq — I was once made an offer by bibe.com to
- ******.io — A Y Combinator Startup — We are exploring this further with the founder of Glowing.io who was earlier my CTO in my first startup and now a friend who I love my conversations with across all spectrums of business.
- .com — A Techstars New York Startup, co-founded by my childhood friends who also worked in my first tech company in 2009–2011. Exploring how Preseed.in could
- IVAT.Com —
- Delhi Furntiture Company — Google it. It is not very well represented in
- DIY Guru
- THE GRAY ERP for schools.
Probable Investment Deals at Preseed
We charge a fee for this, but from investors. The more we are able to gain out of this fee, the stronger we serve our portfolio startup. It is in the startups interest that we make money in this process so we never have to charge our startups the fee for what we are doing for them.
We tell the founders when they come to us, sometimes, years ago — “As long as you have the money for your day to day life at ease, you will make this happen. The founder already knows that, every single time, just as much as we know that about him. We look to enable this founder on some latter date with enough money to remain on the run way for atleast one more year, by putting his own money in a bootstrapped way into his own business. This way of building a startup is of consequence to us”.
The founder reading below should care about just one thing, that he may get money to live 1 more year at ease or so, one day, and for that he is sharing equity with someone Preseed is bringing on board. The bottom line is, the founder gets the money he seeked personally, as if his own shares got bought.
As a matter of policy Preseed values a startup at a post Preseed handshake at a minimum of 1 crore before it brings it forward for investment to the potential investor.
The investors are requested to also bet on the fact that what Preseed is brining to them, once was a mere set of humans with no startup in hand worthy enough, and it was at this time that Preseed held their hand to add its own input into that startup for years, from when founders were early 20 year old kids to now — when they are sitting infront of you.
To say the least, anything lower in valuation is exploitation of Preseed/Nishchal, their network, their do good hippie spirit and their modern collective. Startup assets which Preseed develops relationships with over years are very very valuable, “because my people are rare and their entrepreneurial foundations are strong and deep, a big part of the reason the startup will be successful is that it has us with them over a deal in good faith and words a couple of years ago and the startup decided to keep their word to us forever, for we told them, if they don’t, we won’t take them to the court, we will simply just cut all ties with them. The following is what it translates to:
Before the investor even hears from us , meaning, when its just the startup and Preseed working together.
A startup comes to us in a situation of the start, mostly assuming he needs investment, but what he needs is pocket money. We feel investment can be simplified at this stage. We tell the startup broadly by when we can give them a pocket money of sorts. They walk with us over days/months/years and when they get to the stage when they want to freeze the pocket money deal with us, they do. It is a confidential deal between us and the Startup, which the startup will keep, for they value Preseed over and above any money. For in case of a breach of confidentiality they will lose us forever.
This is what that pocket money deal we struck with the startup on some previous date looks like:
Whatever investment at whatever valuation the startup would have seeked, when approaching an agreement with us in this regard —
- Some days after that, we would have sourced that money at once, from someone from among our network and friend, the investor, as a consulting fee to Preseed.
- and then given the earlier agreed upon pocket money to the founders clothed as consulting fee for all the exchange of minds we have done together. We are in gratitude and this money is going to the founders as consulting fee primarily for that reason.
- The equity you would have given to the investor, had he invested that pocket money with heavy duty term sheets, directly into you, would now be given to our investor friend at a face value of Rs. 10 for a simple consideration like the consideration Preseed has exchanged with the startup — Made up of just sweat. For the value of the investor we are bringing on board is his being, not just his money. A startup must agree that once Preseed has given them the ‘pocket money’ the investor who has given the consulting fee to Preseed to enable Preseed to be able to help the founders, is really not an investor but someone who wants to come and add value in the business hands on.
Basically the startups should think they are doing incredible hand shakes and giving equities for these handshakes. Period. This is best way of building a business when all handshakes are impactful and aligned. While in the process the founders get enough pocket money worth exactly equal to the amount they were originally seeking, from us, to extend their own sustenance run way, over the new Preseed strategies, in exchange for equity to whoever helps us in getting founders that money.
Our investor friend, has simply just borne the cost of owning the proposed equity. Simple business math — they pay a cost to own some asset, in this case, not a piece of land, but a piece of large possibility. High risk, sky high rewards. No small talks of collateral, security, safety etc. If you are looking for that, you are at the wrong place. This is about status quo changing possibilities that go to values of billions someday.
Think of the deal with our portfolio startup, like this —
You are buying a piece of a larger piece of a real estate plot, so that it gives you gains in the future. This piece of land would at least be worth Rs. 1 crore. How do you buy a piece of plot less than that in a prime market of your city? You don’t. So is the reason that you can’t buy the startup we will be bringing to you at less than that value.
If you don’t value the asset we bring to you at atleast that price inspite of the fact that Preseed is a partner in that asset, then you are undervaluing Preseed. And with that jeopardising all that Preseed could do for you in your own business and its interest.
Anyway, whatever is the agreed valuation, and hence, whatever equity you will get, you will get equal to whatever money you give us ‘as consulting fee’ for getting you this equity, at face value directly from the startup, because somewhere they will appreciate all the things you are saying you can do on top of this land. Keep it simpler — Yet you will have to pay me the minimum value for the piece of land you are buying from me.
My final steps:
Step 0 — Investor pays Preseed the required consulting fee. Say Rs. 50 Lakhs to get 50% in a particular startup.
Step 1 — I will get the founders to transfer the equity to the investor on face value the very next day or so. The investor pays Rs. 10 per number of shares it buys. So incase the number of shares were 5000, he pays Rs. 50,000 to the founders for these shares.
Step 2 — I will transfer the pocket money to the founders that they had frozen as a deal with Preseed earlier.
Step 3 — We reimburse the investor for his cost of Rs. 50,000 in acquiring the shares of the said startup.
Step 4 — We remain in touch with the investor to ensure that the startup and the startup team is well aligned with the investor and motivated to perform well for the investor.
Done! Enjoy all cofounders.
Questions like, what happens if your money drowns, are the question investors ask only us. For now, the investor is giving us a consulting fee for a valuation they agree over , with us, for that startup.
Where do we get the money from to pay this pocket money
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Value any startup I bring such that, if you were to own all of it, you were willing to pay 1 crore of upfront cost for 100% of it. Because the value of what I am bringing to you is greater than the possession of a 1 crore plot.
This value of 1 crore per asset as MVP and founding team is the premise of our relationship.
This is the only way you will pay respect for my findings and relationships which I will be passing on to you to help you achieve big things with TinWay as TinWay products.
If you agree with me on that, I will send the next email to you. Which can make this outcome happen.
For the next 3 hours stay tuned to whatever I am writing to you and try to reply as swiftly as possible. So our emails our conversational and we can close the matter today itself. I have to leave for Lucknow and I have stayed back with a simple intent to show you what I can bring to you, and only I can, all of it. 100% of it with a bright team.
Anything I bring to you, no matter what you can do to it, never value it at a less than 1 crore. I will not be interested in bringing anything to you if that be the case. It’s a matter of policy at Preseed and generally in all startup friendly logics in the world, that we accept a valuation of at least 1 crore. Anything of less value is not worth anyone of ours time. You need to on the side agree with me that cafe de Math is worth 1 crore. If yes, then you are genuine in your valuations. If we don’t get this right among you and I, a lot between us may be missed.
It will be a serious breach of trust if there is lack of confidentiality in any words I share with you here on. Allow me to Proceed only if you commit to me that all words exchanged between you and I will remain between just you I and the directors of our respective companies; and no one else please.
Be clear please that Preseed negotiates the deal to bring investor agreed upon % at the instance of his first payment to Preseed as consulting fee. If Preseed makes any gain on it, it belongs to Preseed, it should not be a matter of concern to either the startup or the founder. For both startup and the investor got what they wanted.
We infact deliver a few services from our third service called hustle — for free to the startup if we gain well in this deal flow.
No will ever reveal how much money was paid to who other than as has been decided through my first email.
I am liable to return 80% of your consulting payment within 15 days from the day of receiving this payment if I am unable to bring agreed upon equity % to you as mentioned above + I will also hand over halfpart of my equity in the startup in concern, if I fail, within two weeks from the date of your payment.