Over the weeks, we have answered dozens of questions, ranging from simple (we like those best!) to some which have made us re-think details of how microFunding operates.
So we thought it would be useful to give a brief summary of the more common – hence useful – questions and answers this week.
But before we start, have you been ‘Microsofted’? You switch on your PC and wonder why it’s taking rather longer than usual to wake up. Then you get the message: ‘Microsoft Update in Progress. Do not switch off your computer. This may take several hours and you can not use your computer during the process’.
Can anyone invent something as an antidote? I’d buy it!
Anyway…..questions. What successes is microFunding having? We have at least two more deals that look very promising, about to go through fingers crossed; and some very exciting new ones being posted.
…..access to the Exchange through Introducer sites is expanding. Three more have ‘signed up’, and two more are about to launch. Inventors should remember that the cost of posting an invention depends only on which site they are using: one new one (not yet live) will be free and one existing live one charges just £15.00. But you need to bear in mind that you get what you pay for: it might well be better to pay a bit more and get some worthwhile help.
The most frequently asked question is ‘why haven’t any Managers selected my invention?’ If no-one is looking at your invention, then the Title simply isn’t working: it’s not pulling anyone in. If, however, Managers are looking but not biting, then you may need to go back to the drawing board with your idea. Unless, that is, it’s simply that you haven’t expressed in the posting why it’s so good. It’s one thing to keep the IP secret (quite right too) but not so secret that no-one can see what you’re trying to achieve…..
That’s why it could be worth paying a bit more, to get an expert to help write your posting. You may well reap significant rewards for very modest outlay!
Another question concerns the ‘Proof of Concept’ project. This is designed to achieve three things.
For the Inventor, it quickly clarifies whether or not there is something in the invention: a relatively quick ‘Yes’ or ‘No’
For the Manager, it’s Due Diligence and the Business Plan rolled into one. It’s entirely the Manager who runs the show, so it’s up to him to make it happen. And he must do so at minimal cost, because the PoC needs to determine what has to be done, not actually do it. What, how, who, when and how much: these are the fundamental questions that all businesses need to answer, and the PoC project has to answer them all. And if any answers come out wrong, it’s a shame but…..the ‘concept’ is unproven, the opportunity gone.
For the Investor, the PoC stage is ‘manna from heaven’. For a relatively trivial outlay, Investors discover which opportunities are genuine ‘goers’. And by backing the Manager’s skills and experience, Investors really limit their downside risk while seriously increasing their potential rewards. As I said, ‘Manna from heaven’.
A final question for this newsletter is from Investors: some have asked why they do not get shares in the PoC stage. And although it’s not traditional, the answer is obvious when you think about it.
Many of the PoC projects will unfortunately decide that the idea is not a ‘goer’ quite early on: maybe the IP is unsafe, or the product couldn’t be made for the right cost. In these cases, there could still be money left in the company, which has to go back. If it goes back to shareholders, they will get cash according to their shareholdings; if it goes back to loan funders, they get it all back. So: would you prefer to get back 30% of your money, or 100%….. not really a testing question, is it?
And again, Investors are not Directors of the company at the PoC stage. This is not an accident: company Directors can not qualify for EIS tax relief. So Investors can’t be Directors until after the equity investment, after the PoC stage has proved that there is genuine commercial potential in the idea. Of course, then they will be a Director. Until that time, their interests are guaranteed by the legal agreements and looked after by microFunding Ltd. Which is easy, because microFunding Ltd’s interests are the same as the Investor’s.
You can access the microFunding Exchange through any Introducer’s website, or directly through www.microfunding.co.uk.
Thank you very much for giving us your feedback. If you feel you can add a comment, do please use the ‘RatePoint’ feedback system – there is a link on the microfunding website.
Good Luck!
the microFunding Team