During CityFALCON’s first year of trading, we were fortunate enough to secure £200K worth of funding from a series of high profile angel investors. Every one of these people have our undying gratitude, as without them, we could not have achieved our current prominence in such a short space of time.
As we meet more and more new potential investors in CityFALCON, we frequently hear the same questions – How do you make money? How are you different from Bloomberg and Reuters?
But here are a few of the more unusual questions that we have been asked, along with the answers to them:
1. “What happens to my investment if you fall under a bus?”
My first thoughts were – WTF! You worry about losing 1% of your net worth if I die?!
My response, however, was that even though the business heavily depends on me currently, I’m training our team every day to be able to build a sustainable business and run it in my absence. It will be only a matter of time before the business will move onto autopilot, and at this point it will no longer be completely dependent on me. Thus, should I have any bus-related accidents, no-one need worry but me!
2. “I know you will be a successful entrepreneur. I’m just not sure if this is the right business though”
CityFALCON has already attracted investment from people with a great deal of experience in the market that the company is operating in. The gaps in the market that CityFALCON is filling are real and significant. If they weren’t then these people simply wouldn’t be parting with their hard earned cash.
3. When discussing valuation and impact of SEIS tax benefit: “The value of the business is the value of the business, irrespective of the tax and other benefits?”
The government’s Seed Enterprise Investment Scheme was set up to help start-up companies in high-risk market segments. It offers tax relief of 50% on any investment made in the company during the seed round. By qualifying for this scheme, CityFALCON immediately becomes a more attractive prospect for investors. All things being equal, a company that is in greater demand will trade at a higher price.
4. “You are trying to do too many things, you need to FOCUS”.
Due to the excitement of showing off several opportunities emanating from our two products, I initially failed to realise that this may actually work against me. With more experience, I later took the approach of focusing on one product, one market, and a maximum of 1-2 key revenue streams.
5. “Are you planning to negatively influence my investment position (stake in the company) by raising more money in the near future?”
The answer to this is that if we see a clear opportunity to grow the business and require extra fund raising in order to seize it, we won’t hesitate to bring in more investors. However, we are committed to providing our investors with value and our aim is to ensure that growing our business will also result in the growth of your investment, even if it ends up as a smaller part of the overall whole.
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