Making of an ICO: Journey of a Start Up - Part 4
In the mid 80’s, I watched a documentary on MTV about aspiring, unheard of rock bands in Los Angeles. Every single one of the band members from the numerous groups they spoke with were unwavering and steadfast in their belief that they were definitely going to “make it big”, one day. They had absolutely no doubt in their minds. And I remember thinking how naïve they were.
The day we received the message on Slack, in January 2018, that we would not be receiving funding for our Cryptocurrency Rewards project start-up, I became one of those band members. I was definitely going to make it happen…
When you start out in business, no matter how large or small or simple or complex your project may be, there will always be “forces” pushing you off course. Some tangible, like competition and bureaucracy, and some, like the truck that decides it wants to crash into your car on the day you’re driving to sign your first contract, logic defyingly intangible.
You must always be prepared mentally and commercially to take a diversion but get back on course as quickly as feasibly possible. And never compromise for the sake of compromise. You have do what YOU feel is right. After all, you’re the one that’s going to be nurturing the business to glorious heights.
And for the record, if something is wrong, legally or ethically, don’t do it, even if it feels right. Or good. If something feels good or tempting, chances are it’s “wrong”. As someone once said, “We usually know what we can do, but temptation shows us who we are”. But we’re going off track a little, so let’s get back on course. (See what I mean about those forces…)
…As soon as the message that we would not be receiving funding for the project in Africa appeared on Slack, I started receiving messages from the team I’d recruited for the cryptocurrency rewards project, asking what (the hell) was going on. I was as in the dark as they were and said I’d speak with the Group Project Sponsors. Before I could call them, they called me to say that funding for the airline and airport was “on hold for the foreseeable future” but they still wanted to go ahead with UKa$ii. I felt a huge surge of relief. However, as is the norm when you’re managing your own business or trying to breathe life into a start-up, nothing remains smooth for long. And their next comments ensured the relief was very short lived.
“We may be able to finance the project kick off, for a core team to start in Nigeria, but we would need to renegotiate the packages offered. If you could accept 50% less for the first few months…”
“Stop!” I was furious. But calm. “That’s not up for debate. I won’t accept it and I won’t even bring it up with the team. This is not only my integrity at stake, but yours. We’ve revised our business case half a dozen times to bring down the cost of bringing this project to market. We’re now down to the bare minimum that is required…”
If their previous statement was infuriating their next one pushed me over the edge.
“OK, can you share the business case with us as well then. When did you prepare it?”
During the five months we’d been working on the project, the business case for the cryptocurrency rewards project had been prepared, refined and shared at least 5 times. It had been mentioned on conference calls. And here they were, asking if they could have a copy! It became patently obvious that they hadn’t been giving the project the attention they’d led us to believe it was receiving.
“You said you were going to register the company this week. Have you done it, have you registered UKa$ii?” I asked. It was a rhetorical question.
Again, I called Rob Prophet. He was as dejected as I was. In fact more so, as not only was he in charge of overseeing the airline project but also a number of the other business units including the private helicopter company, all of which he had also enlisted a large team for, both local and ex-pat. He shared his advice:
“You don’t need them mate. You’ve done everything. They had a frequent flyer program in mind and you turned it into a cryptocurrency rewards program. All they were bringing to the table was funding, and they’ve shown they’re not going to be able to do that. You don’t need them.”
I’d already been considering all of this. OK, they’d offered me the role, one that I was grateful for. They had put me on this path. However, it had been five months and there had been no company registered, despite numerous promises. And now there was no funding forthcoming. There was no role! More importantly I’d enlisted people who had depended on my word to become a part of this project. I decided there and then I would go it alone. Not that I had any choice… apart from jettisoning almost half a year of work and planning.
That night I went online and registered UKa$ii in the UK. Including doing the necessary, detailed research into how to establish a company online — as it was the first time I was doing this — the whole process took less than two hours via the www.gov.uk website. And cost just £12, which I paid by credit card. I’d just funded my own start up.
As soon as confirmation came through by email, along with the Certificate of Incorporation for UKa$ii, I asked Rob if he would still like to be on board.
“Of course! I can be as involved as you need”, was his more than enthusiastic response. We agreed there and then that he would be Lead Advisor and part of his role would be to make introductions with potential investors.
That just left the rest of the team. The only problem was, while I could afford the £12 to fund the start-up, I was in no position to fund any staff. A message was sent to everyone via our Slack group, that we would be trying to find start-up capital for the project and if we were successful, we’d get back to them, but they should carry on with their current employment as it was by no means certain when or if we would be successful.
Now that we’d be knocking on the doors of potential investors ourselves, the first thing that needed to be done was to prepare an investment brief (which had previously been the role of the Group Project Sponsors). Again, this was something I’d never done before. But how difficult could it be? I’d prepared (and received) numerous sales decks before for solution presentations to C and D level executives over the years, and this would be no different. Just a different audience expecting to see different pieces of information.
That being said, the key difference between making a solution presentation and an investment pitch is, the audience will be evaluating YOU, just as much as, if not more than the information in the presentation and the returns you project for your project. These are highly tuned business people who know — for the most part — how to spot a winner, both team and project.
If you search online for the “ideal investment brief”, you’ll find various recommendations for how long an investment brief should be. My recommendation is don’t go over 8 slides, including the title slide. So, 7 Slides. If your last slide says, “Thank you” or “Any questions?”, delete your last slide.
The contents of your investment brief should include these at the very least:
- Your solution / project description
- A short industry overview
- A financial summary (which you should know inside out without having to refer to any slides).
- The investment rationale — why investors will want to invest. Include key metrics such as TAM (Total Addressable Market) and your planned strategy to achieve your targets.
- A transaction structure: what will investors receive for what level of stake.
- Your team.
Based on your business you may wish / need to add other content, such as a regulatory overview, but keep it to no more than 7 slides. If the investors are interested, they will contact you for more detailed information if they wish to move forward.
So, you may be wondering, ‘how did you get on with meetings with investors’?
Well, what I learned was, I didn’t want any outside investment. And filed away the Investment Brief I’d spent a week preparing and perfecting. I was going to bootstrap…
To be continued on 20 November 2018.