Startup Negotiations with the investor "amateur"

Greetings
No claim to epic, I want to share a story.

So, the person got in touch with me, let's call him "M". The essence of his words was as follows:

I know people who may be interested in buying such a project , if it is developed.

Before that, we were superficially familiar with us. I knew that he lives in Hong Kong and does some business with the CIS countries.
Well, the whole "business with China" looks like: bought there, sent here.
Those. at least he is not a professional investor / angel / fund, but a person who knows this business from the inside.


Plus he (“M”) intended to use the project in his current business and business of his colleagues.
')
Having discussed the favorite phrase of all startups: “monetization scheme”, a list of cases was drawn up.
My programming teacher said:

You may not remember the names of all functions and all the more of their arguments. But you should know about their existence (not to reinvent the wheel) and should know about where to look for them.

Therefore, in order to broaden my horizons, I will mention all connected with this story. Maybe someone will come in handy.

• Distribution of shares.
• Company registration.
• The choice of the bank-equator.

I'll start not in order.

Company registration.

It turns out that if you register a company in Hong Kong, but do not conduct business in it (in our case, if the site will not open from the territory of Hong Kong), then taxes are also not paid.
Those. although you will not find Hong Kong in the list of offshore companies , it has its features.
I have already written about the impact of taxation
In my case, the registration took the "M". Well, if someone thinks about registration: on this topic, Google gives a bunch of links (including advertising).

The choice of the bank-equator.

Since the payments were supposed to be in rubles, I would like to have an equalizer with the ability to write off in different currencies, including rubles.
First, “M” proposed HSBC, but then abandoned the idea (I don’t remember why).
And he said that the account can be opened in any bank. At the same time, the Russian options, which have recently been regulated to the utmost impossibility, have not been considered.

Part of what is on the market (and their commissions):
Paypal
Skrill (ex moneybookers)
Paymill

It turns out from 3.5% + $ 0.3 to 5%
Same as Russian EQs / Aggregators, but:
1. with a "fix".
2. with currency conversion (and fees for this).
3. and with penalties for charge back (this applies to what is called high risk payments ).

Well, finally

Distribution of shares

This, of course, depends on the amount of attracted investments.
And they, in turn, depend on what goals should be achieved, say for a year.

Version 1 (the simplest and most obvious option):

• We estimate the current cost of the project.
• We estimate the team’s labor costs for the same year, expressed in $ (hours * term * rate).
• We evaluate the necessary investments to achieve the goals.

This amount = 100%
The first 2 points are our contribution (i.e. the team’s work is not paid from the investor’s money), the 3rd is the investor.

To which "M" says something like this:

No, something is not right. I pay the living $ and you give me something incomprehensible. ”Let's take the shares in proportion to the cash contribution.

Ok, version 2:
The calculation formulas are the same, only the team receives a salary from the invested funds.
The amount of investment is growing, but the investor has a very significant share in the statutory fund.
However, this option is not financially interesting to us, and I add an option to buy a share of up to 50% during the year.

As a result, we did not agree, because "M" decided (or just said so) that the current cost of the project, equal in its eyes to the cost of the site, was greatly overvalued.
My arguments are that:

• For the project (website), no one offers to pay in cash.
• This amount is actually equal to the value of the idea (its potential capitalization in a year), my vision and, as it were, the implementation (website).

not convinced him.

Instead of an epilogue

As usual, not getting what you want, we get experience.
And now, I understood the obvious thing, why investors have very strict requirements for executors and the presence of a prototype.
Unlike the "lovers", they only give money.
"Lover" can think

Well, I sort of understand. My business is just about that. I will drive myself, the rest will be done by freelancers.

Well, the presence of the prototype shows that the case has progressed further than “theatrical theorizing”.

But the value of communicating with the "amateur" is that you get practical information about the state of affairs in your industry.
In particular, I learned that:

• The average number of similar shipments from Hong Kong only comes to 7 per day.
• The percentage of force majeure does not exceed 1%, which means we can talk about risk management and insurance.
• You can talk about the costs associated with the delivery of our project 0-15% of the cost, while the single customs rate of 30%

And in the meantime, we have implemented n3 "Network Reputation". Read more