Investors of Lieutenant Schmidt, or how we abandoned the $ 2.5 million investment
Hello friends!
Today I will tell you a story about how we are looking for investments for our rentalist.me site, what we encountered in this search and what might follow the offer of $ 2.5 million to a startup who has embarked on a path to attracting investments.
We intend to attract investment in our project, to convey to millions of people the idea of how useful a thing is rental. But how to do this if the founders of the project do not have money for promotion and advertising? You can read how we went for investments and dispelled for ourselves myths about government support for business in our article .
Now we have decided to attract investments from individuals and companies. The first thing we did was register to participate in the IIDF training and investment program. There it was proposed to fill out a questionnaire for a program participant, which included a very detailed description of our business, possible ways of monetization, a description of direct and indirect competitors, market calculations, etc. A very useful questionnaire, with a training and explanatory video, with charts and tips to fill out. Filling out such a questionnaire will be useful to every businessman, even if you do not plan to participate in their program. One, in my opinion, minus is a very large number of Americanisms in their colloquial speech, which is most likely due to the specifics of the project. We did not pass the selection to the IIDF program, since at that time it was not clear enough to imagine the future of our project in numbers. But we figured out how to consider the market and what issues a potential investor might be interested in, corrected mistakes and shortcomings, and placed our ad on the websites: start2up.ru and investclub.ru.
A couple of weeks after publication, a letter came up with a proposal for funding, followed by another.
Below is a story about what happened next and what nuances may arise in the process of negotiations with "investors".
So, we received a letter saying that a certain person read our announcement on the site and wants to act as an investor. The letter was in English, and all correspondence was also in English. He wrote that he is a businessman, now works in Libya, Benghazi, that he got acquainted with the project, asks what we plan to spend investment funds on, and, after receiving a response from us (the answer was the most schematic, it was drawn up to establish contact and “ to test the soil ”), joyfully calls himself a partner and offers $ 500,000 for 20% in the new company.
Gathering information about investments, we read that Western investors with venture financing do not agree to a condition below 65 percent co-ownership of a joint business. The most common rate is at least 76%. Otherwise, the investor may lose control over the spending of his funds or over the activities of the joint venture.
Naturally, we agreed. We corresponded a little more, asked each other questions, and then the fun began. Our potential investor, instead of taking a detailed interest in our plans to open a joint venture, for some reason began to talk about how his money was deposited in London and in order to receive it, he needed to fill out a document form and indicate the person in the name whom he plans to transfer this deposit. But the enclosed form, for some reason, turned out to be the second page of the document on the requirement of a will and in no way corresponded to what we discussed in the correspondence.
To reasonable questions such as “what does the testament have to do with, and why do you need my personal account information?”, Our potential investor was upset, and, referring to the fact that he could not do business with a person who does not understand basic things, proudly refused to cooperate.
Probably knowing the bank details and other personal information, you can somehow access the account. Having decided that we are not so naive and greedy for money to give our own, we stopped correspondence. Who was it: a Russian hacker or a Libyan fraudster? And what's the difference? Most importantly, we continue to work, and continue to intend to attract investment.
The next "potential investor" wrote to us that he is the manager of a large London bank with $ 2,000,000 in his accounts who died in a plane crash of flight MH-370 and disappeared over the Pacific Ocean. The heirs, allegedly, did not request this money, and he has the opportunity to dispose of it without the knowledge of the bank’s board, namely, to invest as investments in our business. Calling on us to maintain the strictest secrecy, this man did not even ask for any information about the project, while he reported on the need to subsequently “roll back” two percent of the amount to a reliable lawyer who would help transfer this money from a London bank to Russia. Already as an experiment, correspondence continued. Asked a question: what to do next? An exact copy of the letter of the first comrade comes with the same form for the will ... We will continue the correspondence with the "investor". How will it end we will write a little later.
So, we are still in search of a real investor. Wish us good luck!
PS
While I was writing an article, I received a letter from another British bank, HSBC.co.uk. Offer an investment. And what’s interesting is this:
- I open the letter there to the addressee investments@hsbc.co.uk (I think it’s cool! The crooks cannot write from the bank’s domain)
- I press "reply", and there investmentshsbc@gmail.com - deja vu ...
The final step of these negotiations was my request to the “bank employee” to write me a letter from corporate mail, not from gmail.com - there is no answer.
Today I will tell you a story about how we are looking for investments for our rentalist.me site, what we encountered in this search and what might follow the offer of $ 2.5 million to a startup who has embarked on a path to attracting investments.
We intend to attract investment in our project, to convey to millions of people the idea of how useful a thing is rental. But how to do this if the founders of the project do not have money for promotion and advertising? You can read how we went for investments and dispelled for ourselves myths about government support for business in our article .
Now we have decided to attract investments from individuals and companies. The first thing we did was register to participate in the IIDF training and investment program. There it was proposed to fill out a questionnaire for a program participant, which included a very detailed description of our business, possible ways of monetization, a description of direct and indirect competitors, market calculations, etc. A very useful questionnaire, with a training and explanatory video, with charts and tips to fill out. Filling out such a questionnaire will be useful to every businessman, even if you do not plan to participate in their program. One, in my opinion, minus is a very large number of Americanisms in their colloquial speech, which is most likely due to the specifics of the project. We did not pass the selection to the IIDF program, since at that time it was not clear enough to imagine the future of our project in numbers. But we figured out how to consider the market and what issues a potential investor might be interested in, corrected mistakes and shortcomings, and placed our ad on the websites: start2up.ru and investclub.ru.
A couple of weeks after publication, a letter came up with a proposal for funding, followed by another.
Below is a story about what happened next and what nuances may arise in the process of negotiations with "investors".
So, we received a letter saying that a certain person read our announcement on the site and wants to act as an investor. The letter was in English, and all correspondence was also in English. He wrote that he is a businessman, now works in Libya, Benghazi, that he got acquainted with the project, asks what we plan to spend investment funds on, and, after receiving a response from us (the answer was the most schematic, it was drawn up to establish contact and “ to test the soil ”), joyfully calls himself a partner and offers $ 500,000 for 20% in the new company.
Gathering information about investments, we read that Western investors with venture financing do not agree to a condition below 65 percent co-ownership of a joint business. The most common rate is at least 76%. Otherwise, the investor may lose control over the spending of his funds or over the activities of the joint venture.
Naturally, we agreed. We corresponded a little more, asked each other questions, and then the fun began. Our potential investor, instead of taking a detailed interest in our plans to open a joint venture, for some reason began to talk about how his money was deposited in London and in order to receive it, he needed to fill out a document form and indicate the person in the name whom he plans to transfer this deposit. But the enclosed form, for some reason, turned out to be the second page of the document on the requirement of a will and in no way corresponded to what we discussed in the correspondence.
To reasonable questions such as “what does the testament have to do with, and why do you need my personal account information?”, Our potential investor was upset, and, referring to the fact that he could not do business with a person who does not understand basic things, proudly refused to cooperate.
Probably knowing the bank details and other personal information, you can somehow access the account. Having decided that we are not so naive and greedy for money to give our own, we stopped correspondence. Who was it: a Russian hacker or a Libyan fraudster? And what's the difference? Most importantly, we continue to work, and continue to intend to attract investment.
The next "potential investor" wrote to us that he is the manager of a large London bank with $ 2,000,000 in his accounts who died in a plane crash of flight MH-370 and disappeared over the Pacific Ocean. The heirs, allegedly, did not request this money, and he has the opportunity to dispose of it without the knowledge of the bank’s board, namely, to invest as investments in our business. Calling on us to maintain the strictest secrecy, this man did not even ask for any information about the project, while he reported on the need to subsequently “roll back” two percent of the amount to a reliable lawyer who would help transfer this money from a London bank to Russia. Already as an experiment, correspondence continued. Asked a question: what to do next? An exact copy of the letter of the first comrade comes with the same form for the will ... We will continue the correspondence with the "investor". How will it end we will write a little later.
So, we are still in search of a real investor. Wish us good luck!
PS
While I was writing an article, I received a letter from another British bank, HSBC.co.uk. Offer an investment. And what’s interesting is this:
- I open the letter there to the addressee investments@hsbc.co.uk (I think it’s cool! The crooks cannot write from the bank’s domain)
- I press "reply", and there investmentshsbc@gmail.com - deja vu ...
The final step of these negotiations was my request to the “bank employee” to write me a letter from corporate mail, not from gmail.com - there is no answer.