My name is Marina Tognetti, I am the founder of
Myngle. I would like here to share my experience with the how’s and what’s
of fund-raising and give some tips on funding for other first time
entrepreneurs.
Myngle launched end 2007 and received 2 rounds of early stage funding, one
beginning 2008, and one beginning 2009. Before Myngle, I had had an extensive
career in corporate environment, this therefore was my first venture and all
what I have learned in fundraising was done by discovering it step by step (and
accepting some first-timer mistakes).
1. First
decide: how fast do you want to grow?
The decision on which type of funding and the amount
very much depends on the stage of development of the company:
Which type of investors? Angels, VCs,
Bank loans best fit different stages of growth.
First seed round of funding for Myngle was with by a Dutch early stage VC and
some private investors. As the ‘sell’ was done before launch based on not much
more than a business-plan, the best opportunities here were starting from closer
personal contacts and moving from there. Cold calling to new unknown investors
generally does not deliver the best results, if the Company has not yet been
launched or has not gained some sort of external visibility.
How much & when? We decided to
fund the venture in steps, in order not to dilute too much too early. Second
step was therefore beginning 2009. Keeping dilution in mind, we applied and received
an additional funding by mean of a special bank loan with a Dutch bank Rabobank,
backed by the Dutch Government (Innovatieborgstellingskrediet –
Innovation-credit, which means that is a loan guaranteed from the Dutch
Government in order to support promising new innovative Companies).
I do not know if similar constructions can be found in other Countries, but it
is always worth investigating.
2.The official ‘Tips & tricks’
These are all well known, and can be found also online
in many articles on how to get VC funding, but they are important:
The business must be well understood and explained in
each of its critical aspects: opportunity, problem, target market, competitive
advantage.
In a very early stage of execution, you do not have
results yet to support the case, so most important ingredients to predict
future success are the team, the product and some initial validation done with
real users.
Myngle is a
very innovative concept, which makes it at the same time easier and more difficult
to ‘sell’ to financers. On one side you get a lot of interest around the
concept, but at the same time, as it is a pioneering product, it demands a leap
of faith in the future opportunity and belief based purely on the capability of
the management to execute. The more 'proof' you provide that you indeed know the
work ahead, are able to execute and have some sort of validation (even
on a micro scale), the better it is.
3. Myngle
additional ‘Tips & Tricks’
These are things we learned along the way, and
probably one of those examples that as first time entrepreneur you just
‘discover’ but will gladly apply it in any new venture in the future
Plan well your cash needs as the
funding process normally takes longer than expected. Even once the price and
value of your Company is set and agreed for funding valuation, it is the
discussion and agreement of the small clauses in the contract that takes the
most time. Plan to have sufficient money to be able to conduct all discussions
with peace of mind, without cash constraints. Start early, you are always
stronger if the other party knows you are not in desperate need for cash.
Awards, PR and high profile partnerships
are important for a startup to gain visibility as well as credibility, and help
set one start-up aside from the many others.
I had not planned for this to have such a high impact, but truth is that there
are a lot of nice ideas out there, a lot of enthusiastic entrepreneurs that
believe can change the world, and all with the right reasons and perfectly plausible.
What you need is something that puts you aside from the others.
You do not need to participate in all contests, but choose a few you think
might have impact. In the case of Myngle, because of its innovative character,
we have been winning different Awards, as Accenture Innovation Award 2008, European
Venture Summit 2008, Plugg people’s choice 2009. There are always venture
capitalists in the public and jury, it is really valuable to be able to
showcase your business, and possibly enhance it with a prize.
Feel free to contact me at marina@myngle.com
or visit Myngle site www.myngle.com
Myngle background:
Myngle is
the global online platform for live language learning, with more than
50 languages, and qualified teachers from more than 120 countries. Myngle
offers selected and guaranteed online live lessons, personalized packages,
asynchronous products and free resources to complete the learning experience of
students.
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