Startup LinguaLeo fueled with rocket fuel

Venture investment rocket fuel for a startup filed!
Today we received the first tranche of the investment project LinguaLeo. Angels and venture investors have finally noticed the project and are ready to invest in the promising future of the startup LinguaLeo.

, : LinguaLeo — - .

It happened at the most opportune moment. Since the summer of this year, the project founder’s own funds have not been enough for the active development of the web service, which has led to the suspension of development for six months. About how and from whom LinguaLeo received investments, what happened in these six months, where the investor was found and what LinguaLeo is waiting ahead, and also that we invite two talented developers to the project - under the cut!

The exclusive conditions of web development in Thailand allowed for six months to release a beta version of the service, which everyone could watch from March 1, 2010.


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The history of creating a web service was interrupted at a stage when almost the entire project team moved from the Thai island of Koh Chang back to Russia. The reason can not be trivial - out of money. The project froze, from expenses there were only payment for a dedicated server, minimum payments to an accountant and the salary of the person who responds to users' letters.

And everything happened because the founder of the project made one big mistake. He hoped to attract venture investment in a startup from a major strategist , one of the largest IT companies in Russia. However, after a long unsuccessful communication, he realized that when the project is at the start-up stage, one should not expect “best venture investment practices” from strategic buyers.

So the founder of the company, Aynur Abdulnasyrov, describes the story: “Even before I started working on the project, I had been in talks for six months in Thailand mainly with one big company on investments. The whole calculation was what benefits this company can bring to a successful investment in the LinguaLeo project. However, my expectations about this company, even in view of all the potential synergies, did not materialize: strategists do not need startups. They are not ready to play venture games, they are not ready to take enough risks for the sake of frantic opportunities. Many of the strategists want to buy startups at a price calculated from current sales, and not according to the DCF method, which takes into account the prospects of the project, as is customary in venture capital investors and even business angels. In the end, this company made me an offer that almost killed my belief that you can do startups in Russia, relying, if not on the “best”, but at least on the “acceptable” practices of venture relations. My mistake was that I wanted to attract a strategist at the start-up stage and expected a strategist to conduct a venture investor.


After I received their investment "offer", I spat on the whole thing and offered them to buy a project with giblets, but without me and the team. They refused and did the right thing: who needs a project without a team?

From that moment until October, work on LinguaLeo was going on in a sluggishly-current mode, although at the same time, 200-300 new users registered on the service every day.

In early October, I made one important decision: I would go to start-up parties at every opportunity. I remembered the importance of communicating with the same risky poor fellow startups like me, I remembered how many common problems and solutions can be found at such parties.

I was invited to Perm to the Youth Innovation Convention, and I went. To put it briefly, I was delighted! Almost immediately after Perm in Moscow, the “Begin” session took place, I went to her, because I was impressed by the fact that the guys from “Begin” turned in a convention in Perm.

The Moscow Begin session was held at the Strogino Technopark. On the first day, you could make a presentation of your project, and I talked about LinguaLeo. Nothing much happened. Entering the room for a coffee break, I saw a friend there and started a conversation. And next to him stood a large, vigorous and smiling man. Word for word, and in 2 minutes I told him what is happening so interesting inside LinguaLeo: showed the statistics of visitors to the service, the dynamics of payments from users, showed its calculations of the prospects for the project. Suddenly, we began to discuss the terms of investment in the project. I remember that at the beginning I spoke with him very incredulously and with suspicion. (After six months of uselessly spent on negotiations with the “ideally suited” strategist, I lost faith in finding an adequate investor who would not only speak, but also act). But in the evening of the same day, we practically made a decision on partnership.


The very next day (the second day of the “Start” session) I called the last missing figure in the details of the transaction. Within several days, I and the investor signed the “Agreement of Intent”, and as a result, the LinguaLeo project had not one, but three angel investors with specialization on Internet start-ups. They estimated the project at $ 1 million! During ONE WEEK, we agreed and signed all other papers. This is how venture investors and business angels can do. Strategists are not capable of this, they are too slow and not very familiar with the rules of the game. After signing the agreements, other potential investors approached me, but, as they say, “who had time, he ate”. By the way, the LinguaLeo project took the honorable first place at that session and applied for a 2.5 million rubles grant from the Agency for the Development of Innovative Entrepreneurship (this was already after we shook hands with the investor). ”


Now we are fully engaged: we get a residence in the Strogino Technopark, we are waiting for the results of a grant from the ARIP, and from mid-December the LinguaLeo project team will again begin to approach the future of the LinguaLeo project in the study of foreign languages. The technical director of LinguaLeo, Aleksey Odin, moved from Perm to Moscow, the frontend developer, Nikolai Shakhmatov, will work on the project remotely from Thailand (where he still lived), and to strengthen our team we are looking for two talented web developers: one frontend developer and one PHP programmer . Now more than ever we need talented hands and hotheads, ready to create a cool product with us! By the way, we have decided to motivate key members of the team with stock options.

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PS: We received more than two thousand messages with wishes and comments from users. Now we can realize what we have been asked for so much. We will do everything for this. Thank!