Anelok: business 3/4, finances
werner at almesberger.net
Thu Jul 16 21:38:31 UTC 2015
The project has so far been self-financed, but it will need external
money to proceed. This is a rough overview of financing stages in
relation to the product development process:
The funds will be mainly used for
- compensations, i.e., what's needed to keep key people in the
- lab, office equipment, and any other infrastructure (servers, etc.),
- materials for prototypes,
- external services, such as prototype manufacturing, accounting,
certification (FCC, CE, ...), etc., and
- pre-financing of production.
The idea is to have multiple fundraisers, some of which would be
crowdfunding. Ideally, the crowdfunding would not be attempted
before the product looks reasonably nice and the of number potential
surprises and delays is low. Therefore, we'd like to try to make a
first fundraiser based solely on donations and possibly investment.
This may sound complicated, and it is. The reason for this lies in
no small part in very tricky legislation that impedes a lot of
- Donation: you like the project and give it money, expecting
nothing in return. Almost as if giving money to a charity, except
that Anelok is not a charity.
- Loan: a loan would be a contract where you give the company money
and the company promises to pay it back. Unfortunately, regulations
seem very unfriendly when it comes to loans. In particular, it
appears that, under UK law, the company would have to have at any
time (!) assets that are at least as valuable as the total debt,
lest it be declared bankrupt even if it hasn't missed a single
So for now it seem that taking loans would be too risky.
- Investment: the company can and will emit shares, which can then pay
dividends, and so on. However, being a private company, it can't sell
shares to anyone who isn't already affiliated with the company.
A publicly traded company would not have such restrictions, but there
would be an enormous overhead for reporting and compliance.
It seems however that anyone who is interested in becoming a founding
member of the company could do so, just as long as the company hasn't
been created just yet. We're investigating this possibility.
- Pre-orders: this is basically what crowdfunding is. That can be done,
but if we accept pre-orders very early, there may not be all that
many, and any marketing campaign aimed at attracting crowdfunders
would be inefficient or dishonest (or both) if development is still
far from defining the actual product.
Another disadvantage of pre-orders is that one has to involve a large
number of people is significant funds are to be raised with a product
of moderate cost.
So we would like to start with donations or (if this works out)
additional founders now, and then make a crowdfunding campaign later
on. The exact timing and the number of fundraisers depends on how much
we could get on each round.
More information about the discussion