Closed date: 31st July, 2018
Company description: Crowdequity platform allowing non-professional investors to invest in Private Equity funds
LinkedIn profile: linkedin.com/company/savizy
Location: Paris France
Founders: Ugo Malibrera
Number of Employees: 1-10
Founder Twitter: @ugomali
Reason for failure: Failed to commit developers on the MVP so VC dropped the case
Submitted failure story: FinTech is hard to fund without solid prior experience in Finance
(original post on medium.com/@umalibrera/postmortem-fintech-is-hard-to-fund-without-solid-prior-experience-in-finance)
We had a dream: allowing anyone to maximize their saving by entering in high return on investment (ROI) Private Equity funds (up to 20% per year).
In most countries, these funds are limited to professional investors, basically financial institutions or wealthy people. With a hack we found in the legal system and a fine use of Blockchain technology, we could create a Crowdequity platform allowing anyone to access these funds.
We rapidly got a meeting at a major VC fund with a partner. He was thrilled by the use-case but worried about the willingness of these investment funds to let us invest in them.
Beside our prior experience in M&A and Private Equity, he admitted these investments funds were very picky and that they would never open their funds to us alone.
However, they would consider it if we had a finance rockstar at the board. The VC partner told us he would have put a seed ticket if we already had one.
He also asked for a very solid MVP (almost a finite product) to start prospecting the funds with a SaaS angle. We were in a chicken and egg situation as we were low on personal funds and we had met him for seed.
We started activating our network and integrated a Blockchain developper we knew as our CTO. On the other side, we contacted all the Finance C-level, by any means. We also reinforced the technical pitch and our legal knowledge contacting all the regulators we could.
Meanwhile, the developer, who was in a full-time position in a major bank in London, had less and less time to make advancements. He offered to postpone production as he was overwhelmed by his work at the bank and could not abandon his job on the spot due to financial reasons.
He offered to connect us with other Blockchain developers he knew (which is, trust me, an extremely hard ressource to find). None of them were qualified nor available.
Despite all our efforts, we could not reach those finance rockstars we needed to reinforce credibility and potential funding.
As we reached the end of our funds and the developer could not engage fast enough, we all had a discussion and decided to stop the project.
What we learned from this first startup experience was that:
Funding a Fintech without a co-founder that has a long experience in the field is nearly impossible
Having a part-time CTO when the technology is a key element is a very bad idea
The story is not over yet as I will meet one of these C-level later in 2019 during a network event but the post-mortem of Savizy is most likely definitive.