Summary
Notes
Transcript
We raised our safe route, and we're working on our C-Route, which was planned to be $9 million, and it was going to be $4.5 million from set. from venture money, and we got our lead investor, and we were, you know, we were satisfied with the valuation and like them as the lead.
So, all we were planning to do is get a couple more investors to fill out the round. Good morning, Jason. And everything was going to be great. And then I got an email from SET asking me the specific name of the funds, not the firms, but the name of the funds.
And I didn't understand why they needed that. And I found out that it's because there's a certain, if the fund got their money from public institutions. The percentage of the money they got from public institutions is not eligible for them to match. So in the case of Grow Capital, our lead investor,
We were expecting that for every dollar they invested, we got a dollar from Set. It turns out for every dollar they invest, we're going to get 15 cents from Set. Okay yeah and then the same up at IASO Ventures for every dollar they invest we're gonna get 73 cents.
We were also invested by the set, like 49% I believe, but we had to sign it still. Good to know because we've been getting a lot of startups with this said promise. So good for us to know. Yeah, I mean I was very unhappy that they waited so long. We've been dealing with them for six months and their story never changed.
For more than six months for us, yes. They are super slow. They don't really understand the startup world, sadly. That's right. They make their good attempts. But. So now what's the plan? What's the idea? So the plan was, OK, you know, there's a couple of things we could do. We could just say, well,
You know, we're going to have to raise more venture capital and to fill out the nine million because a lot less of it's going to come from set. Right. But we figured that was going to take us. additional time and was going to potentially run, you know, take us past the end of our runway. And so then we thought, okay, we can reopen the safe.
And just bring in some more safe money to extend the runway. And so that's one idea that we had. And the second idea was we can reduce the size of the seed round. And we were planning to tranche our capital needs into two tranches, C and series A. And then quite frankly, you know, if we hit plan.
We don't need a series B and so that was, you know, unless we're doing acquisitive sort of things and and so that was what we the initial. What we decided to do is reduce the size and then tranche it into three tranches, to a series A and then a series B.
And so we'll still end up raising the same amount of money. We'll just do it in three troshes instead of two. They'll be smaller troshes. And so that allowed us to take the seed down to A $6 million round instead of a $9 million round. And we're still going to opportunistically look to bring in a little bit more safe money just to be
I hate to use the term safe, but we're not going to super aggressively pursue it. But, you know, if there's firms out there that want to make a small bet. And, you know, write a small check and get involved and be part of it. It opens the door for them. I mean, we'll probably limit that to 500,000, but, you know, take it in smaller checks.
And only from people we really want to get into the round. And to have this as part of our cap table. Because we most likely don't need it. Right, and it's dilutive, so we don't want to go crazy but at the same time, you know, a little extra capital, you know, we still now that set has played one surprise on us.
We don't know if we might get another one. They say they're going to be ready to close in December, but what happens if they have some other thing come up and all of a sudden it's February? Well, also, to be honest, I am super sorry for the surprise because I know, like, impossible to imagine, obviously, so...
Good that you find a solution. From our side, we are also on the wait for the set. As I said, it's going to be one of our pieces. We still need to sign with them and they still need to wire money. So that's right now like a bit of our bottleneck in making more investments. So that's why when I spoke with Sergi, I was interested in knowing, like, you know.
Maybe probably this year we can't commit more deals but beginning next year we should again like also if the set doesn't surprise us. We're still advancing with private money, but private money versus like millions, it's different. Yeah, I understand. You know, like the seed, when do you plan to close it? Maybe you can tell me, like, what are the terms you're thinking about? Is it still going to be with grow?
Yes. Yeah, Grow is just going to give us a new cap table for the $6 million. I mean, sorry, a new... Evaluation? Yeah, I'm sorry. Yeah, new term sheet. It's earlier. Anyways, they're going to give us a new term sheet for that allows because the first one was from seven to nine million. And so this is going to be six. I don't know that it's going to change the valuation.
If it does, I know it's not going to be contentious. They're really good folks. And so they're still going to lead the round, and we're still very happy with them. I mean, through all of this, They have, they've been amazing. You know, they just like, okay, what are you gonna do next? How can we help you? Right, who can we introduce you to? They've just been fantastic.
We know we've got the right folks involved. The experience I've had with your firm so far has been so positive. When I listen to Pepe talking about The way that you guys view founders and startups, it was just so similar to what I believe. And, you know, Jason and I work.
Even if it leaks into January, you might still be able to get in. It could be a little investment in the safe. It could be a larger investment in the seed. You know that's entirely up to you. Yeah yeah of course. So at Seed we usually invest like 250. That's more of our standard ticket and if we can like we would be doing.
and disinvestment. But yes, probably something we need to revisit once we know more about our own fundraising situation. So January we will know more and we can of course keep you updated like in the next weeks on how that's going. But yes, I think personally I've also had a really good experience. I think you are one of the most experienced teams that I've seen. So that's always positive, especially in this area that is very new.
Which investors did you get to meet? How was it? Also, for feedback for me, because I organized it. We really appreciate being invited here, because the band helped me with Silicon Roundabout, which is fantastic. The talk that there was before between these guys was also very interesting and well moderated.
And maybe I would have made it like forced changing, like 10 minutes with one, 10 minutes with another one. Because it's hard to talk more with Francesco, but it's just one contact. With Faber, we already knew them. Do you think you will follow the conversation with Francesco? We are waiting for his feedback.
We created it and we are working on it. So, well, he's usually in London, but yeah, I think also they explain you like we like investing also with international investors where we do like. It's not really like a deal breaker, right? But we also like introducing you to other types of investors that are international or specialized, also because we come from this aldea ecosystem.
that has invested in many specialized managers. But I don't think Francesco is from Aldea. I just think we just collaborate a lot. I don't remember right now. Do you have any questions for me? No, just I guess the only question would be, do you have all the information that you need, or do you have access to everything that you need so that you know, should you're.
Should your, you know, internal finances get to the position where you're looking to make investments that you can, you know, you can finish your analysis of us? Yes, let me check. I don't remember if you sent us your data room, did you?
It's a good question. Let me check right now. Yes, I'm also checking. I got one from you. Yes. Yeah. Yeah, I don't really... I don't recall us opening the data room for you. That's why I asked the question. Yes, I also don't remember seeing it. So I guess if nobody remembers anything, it's probably me. Let's assume that you don't have it. Jason will get you the credentials to get into the data room.
And pretty much everything that you need should be there. But if you don't find everything you need, please let us know. And in there, you'll also find this, you know, of course there's the boring stuff, formation documents and all of that stuff that of course you need to have.
Sergei, have we included yet all of the incorporation and formation docs for the Spanish section? There's nothing related to the Spanish section yet. Can you work with Jason and with the attorney Clara and get all of the foundation documents and incorporation documents from Spain?
into the data room real quick. Yes. Okay. That'd be great. And so personally, I think if the cap table is there and a couple of more like standard documents. I'm good. So, yeah. We are not going to be looking into, like, the vilos. Maybe, like, bypassing that.
Okay, if there's anything that you do need, it'll probably be in there. And some of the other things that are in there, you know, we, as we capture articles. You know, interesting articles that are relevant to, you know, our thesis and our business plan, you know, about trends in the industry or events in the industry, we put them in there as well.
If there's anything that anybody wants to read about what we're doing, you'll find that as well. I'm sure the data room will be super complete, so I'm not worried about it. If I have more questions, I'll ask them over. Also, on the fundraising, for your Series A, are you also thinking about doing your Series A next year? Or will that be a little bit delayed?
Yeah, no, it won't be delayed. It'll be next year. And the speed with which we do it is going to be determined by set. Because SET has committed to participating in the Series A. Even though we're reducing the size to $20 million, having a chunk in there from SET would be very nice. What we're going to have to do is, as we look for new investors to come in at the Series A level,
One of the selection criteria that we're going to have to use is how much public money do they have? Of course. Everybody that came at the safe or the seed will be eligible if they want to invest in the Series A. But when we're selecting new investors, we're going to try to select.
ones where we get you know the full hundred cents on the dollar from uh from set of course very very reasonable and what which type of partners would you look for like What would be one of your ideas? Probably looking at American or Asian. Some of the corporate VCs, Intel Capital, Samsung Capital, Micron, Samsung Ventures, Micron, you know, those are the kind of characters that, you know,
You know, we think would be a nice addition at the next level, you know, they bring some strategic benefit, they get 100 cents on the dollar, they would kind of balance out Europe and in the US. There's not a lot of funds in Asia that I want to deal with. We're staying clear of China.
A lot of Singapore money is tainted with China. In Japan, there is no start-up ecosystem. There is very little in the way of start-up VCs in Japan. There are some corporate VCs in Japan. that we may be talking with. I've got some friends over there. So, you know, we may balance it out with a little bit of Asian, but I suspect...
The first round will be very heavily in Europe and then the Series A will probably be more balanced globally.
We actually had in this event at the corporate VC of Huawei and yeah I think like since it's from China it was a bit hard, but it's still interesting. So yeah, that looks great. I don't think there's more from my side. So I'm just looking forward to receiving the access to the data room.
You just got it. You already have it. You're fast. That's a good sign, always. Let me check. Perfect. I've never used a dataroom in Carta, so first experience. Really? Yeah. Like, I read the post from Carta, but never the dataroom. Like, many of our jobs...
Jason, are you pretty satisfied with Caravan? Yeah, yeah. I mean, in the U.S., that's what the vast majority of startups use. Yeah. It's kind of like if you're not using Carta, people ask why. For us, they use Notion as their data room, like light data room.
But yes, I guess as you get more advanced, you need more protections on your things. Google Drive, OneDrive... That is so interesting. Okay, well listen, it's so nice to talk to you. And let's just keep the communication going. Sergei is there all the time. Jason and I are there a lot of the time.
But, you know, just probably surgery is the easiest one for you to check in with. But Jason and I are always available. Amazing. Nice to meet you, Jason. I don't think you were in the other meeting, so. Good that we could chat. Yeah, all right. Thank you so much. You too. Have a great day or morning. Thank you. Bye-bye. Bye-bye.
Okay. Okay.