16,000 SMEs sought me to raise funding for them. Out of 16,000 SMEs, I finally accepted the appointment of over 3,000 over SMEs. I myself have invested in about 10 of them.
Many of my clients / SMEs I invested in / consulted with are very puzzled at the way I deal with raising funding. I have 3 rules that are not to be flouted.
1) Never ask the investors to believe in you (because, why should they?).
2) Never ask the investors to understand your project (because again, why should they?)
3) When you are talking to investors, you must increase your revenue at the same time (And I am not going to entertain remarks about not having the investments to increase the revenue).
And also, investors are not here to solve your problems. They are investing to solve theirs, so no need tell them your problems.
I am honoured to be involved in the innovative online ecommerce project dealing with spectacles & contact lens.
Too many fund raising are mostly strategic – meaning that they need money to sustain and continue or expand. When you have that problem, investors would squeeze the companies dry.
So here is the step by step procedure in which I structure the project for growth and present to interested angels whom may be interested to invest in this. This is a tactical plan to raise funding and it would work fabulously even if your fund raising fails.
1) Evaluating whether the USP is defensible
The USP is not bad and highly defensible. Generally, nobody can sell spectacles & contact lens without a license. So Lazada & Zalora cannot compete on those areas. And those who have licenses do not understand ecommerce sufficiently well to go into this area.
2) Defining Shareholder Structure
Some shareholders are bound by shareholder contract to contribute to the revenue and bottomline to the company, and it is not just a well intentioned understanding. Succeeding in achieving those aims would trigger a clause for greater rewards in shares.
This removes the possibility of arguments later in the company because of unclear expectation. This is totally unlike the structure possessed by 90% of the companies in Singapore, when a disagreement may just cause the company to be completely closed down.
3) Franchise Business Model Design
All shareholders are made franchisees of the Company. From there the franchisees are going to contribute in expanding the reach of the company.
The franchise also allows more partners to be involved in generating revenue for the company.
4) Defining the Option Pool
When the option pool is defined for all shareholders, franchisees & also staff the certainty of the company is more assured.
Ironically, it would make the company less dependent on investors. As the company could be financed by revenue and not necessarily by investors’ funds.
In case you may want to participate as franchisees or just want to know more how this structure allows your company to grow very fast, safely for yourself and also for your investors, do fill up the form here.
We are also glad that the company has met up eventually to firm up all the structures with our company secretary. When we firm up all these structures, it facilitates a healthier growth for our company.
I appeal to all the people raising funding for their companies.
Entertain, just entertain the possibility that what you need is not really money. It is a way to structure your company and the money would flow in.
After all, the world has a problem of too much money.