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Whilst the final content
of investor agreements will be tailored to the requirements of all of
the parties involved, our draft agreement templates incorporate
sliding scale penalty clauses. These are structured to reward resource
and capital investors for finding substitutes in the event that they
want or need to make a premature exit. Conversely, these clauses
penalise them with the loss of their deferred payment and profit share
rights as well as a negative project log entry if they default with
little or no notice.
If retained in the final
agreement these clauses help safeguard your investment by discouraging
supplier and investor default on pre-agreed commitments to provide
products, services or capital.
What are my chances of securing investment?
The current approach: to
raising finance results in only around 2% of business plans submitted
for early stage investment ever get any funding. Whilst this statistic
in itself is disappointing, it can also be very costly where
entrepreneurs are asked to pay up to £5,000 in advance for the
privilege of being rejected. There are a number of unregulated
advisors without access to the necessary funding sources or support.
There are many others who charge a lower up front fee of a few hundred
pounds to distribute your proposal, unsolicited and just as
importantly, unprotected to a 'vast' database of potential
investors...where this is done, they may be an opt-in mailing database
of high net worth individuals who may not even be looking to invest in
your sector.
Our approach (international
patents pending): which both mitigates risk by breaking down the
requirement into trackable resource based micro-investments and then
goes on to significantly expand the investor audience by including
suppliers is entirely different.
Firstly, you are in the driving seat. Secondly,
our process is extremely transparent. We do not charge up front fees*.
You prepare the proposal, receive the feedback and appoint additional
resource to fill the gaps where required.
For example, if a few key early stage investors
decide that they require more substantiated projections prior to
proceeding, then you can create add a local market researcher,
salesperson or distributor as a required resource. You may end up
giving away a little more (or with our larger audience and reduced
risk) less equity, but the additional 'critique' will mean that your
venture ends up validated and resourced properly...or not at all.
Established companies 'start up' new ventures all the time with a much
higher degree of success than 'stand alone start-ups' - examples are
entry into new markets or the launch of new products. The only
difference is that they have adequate financial and management
resource - using our approach, we aim to establish and then help you
acquire the appropriate level of resource required to make your
venture a success.
What happens after I register?
When you return our
completed pre-qualification questionnaire (PQQ) and uploaded the
information to our matching database, we will granted you access to
complete the definition of your implementation plan on the relevant
our industry specific template and define an investor audience. This
will be used by that can be used by the Pie Matching engine to
produce a number of fulfillment plan options to obtain the best value
for you and go from there...
I have prepared a business plan. To whom
should I send it?
Hold on to it for the
moment. The Pie Micro-Finance solution is highly automated to
eliminate costs to you and maximise the size of the available investor
audience. You will need to take the contents of the business plan,
populate the relevant content into your implementation plan and
enhance it as requested. As stated above above, we can do this for a
pre-agreed cost that needs to be determined on a case by case basis.
Who evaluates our
proposal?
The investor audience...but
we provide the communications and measurement framework for them to do
this efficiently. Instead of the usual one or two investors, there may
be tens or even hundreds of micro-investors that pour over your
implementation plan, identify gaps and suggest solutions - many heads
are better than one! Depending upon the access you and the any prior
investors grant, they will have access to view, appraise and provide
you and the rest of the investor audience with feedback.
In what areas do
you invest?
We do not generally directly
invest (as that would limit the scope of what we could achieve), but
our sophisticated fulfilment engine can achieve an even better outcome
by breaking down your requirements into resourcing requirements and
matching them to relevant members of our resource supplier, industry
expert and capital investor networks. Our current capital and resource
micro-investor communities cover the web, software, manufactured
product, foodservice and third sectors.
What happens if I decide to pull out or
the venture underperforms?
Pre investment: you will not
incur any financial penalty. You will still be bound by our site terms
including our non-disclosure agreement so you will not be able to use
our implementation plan, resource lists or third party contacts
identifies through our process without our permission - we are open to
negotiation for access to this information on a case by case basis.
Post investment: to safeguard the interests of
parties, particularly pre-revenue early stage investors, the standard
investor agreement generated by our system includes a reverse royalty
agreement - see here for the default standard investor agreement terms
which included this and other clauses. Depending upon the stage and/or
degree of underperformance, the other investors will be at liberty to
use the IP and knowledge owned by your venture on payment of a royalty
(percentage of revenue) to you and the other investors. This clause
may be excluded by negotiation (although this may reduce the size of
the investor audience) and thresholds can be set at level where these
rights are not awarded for minor underperformance.
How do
you comply with FSMA and other investment legislation?
Investors can make use
of the PIE rights trading platform to find substitutes. buy and sell
investment opportunities and trade rights to fund cashflow. All trades
need to be completed outside the portal to allow us to comply with the
FSMA regulations.
Skills, products and services will be supplied on a deferred payment
plus profit share as opposed to an invested basis and therefore are
not treated as investments.
To see guideline terms
(final terms to be determined by you in conjunction with capital and
resource investors) - click
here. |
