From college dorm to the very first deal and real investment.
I was thinking for quite a while on how to reflect the real experience of building out a company from scratch. Without all the PR bullshit, changing the world crap and infinite hockey stick growth, just plain vanilla reality. Something refreshing, you know…
So I will be posting weekly “Keept It Real” updates about our experiences in building out Creamfinance.
So the first one today will be a look into our very first investment deal. Myself and my business partner Davis Barons raised EUR34,000 from a friend of mine at a pre-money valuation of…EUR53,000, so the investor got 49%. As part of the agreement we could get back significant amount of equity from the investor if we delivered certain targets over time.
Of course pre-revenue rounds normally are done as convertible debt notes, but how do you know this as a 22 year old with no real business experience? The point is, a small investment is better than no investment, it gets you started, even if only for 2 months (that’s right, two months after the investment we were out of cash) but once you have no way back, you have no option but to get resourceful and keep going!
Here is a snapshot from our very first shareholder agreement (sorry if you don’t speak Russian or Latvian).