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    0 Replies Latest reply on Jun 14, 2008 5:25 PM by valcon529

    An e-Education Start-up is looking for Funding

    valcon529 Newbie

      We are a Delaware-based LLC that aims to provide an online pedagogical environment for teachers and students. The system's mechanisms have been reduced to practice with a preliminary desktop application prototype, with which preliminary market research (in schools) has been carried out, money has been earned, and a provisional patent has been filed. We also have recently placed third in a business plan competition by a top business school in the U.S.

      We are currently negotiated incubation overseas, where the incubator will finance researching and developing an advanced version of the prototype, and establishing market viability, and in turn raising VC money. The incubator will fund the prototyping with no equity in return, and claim NOTHING over the created IP. Instead, it simply has two pre-requisites. First, all the money has to be used in the incubator for prototyping, and second, an investor should be already available. The latter condition is due to the fact that the incubator will reimburse for the R&D expenses, rather than supply the money up front. The incubator is offering $100,000 to $500,000.

      Having said that, we are looking for the following non-conventional deal: a seed capital investment that will cover the R&D operations (including developing the prototype, researching the market in-depth, and securing IP ownership), in return for share equity. The investment is intended to prepare the company for VC funding round. The non-conventional part is that the R&D expenses will be reimbursed at the end of the period, which is 6 to 12 months. In essence, dear investor, you are buying shares for free. The deal can, perhaps, be formalized in the form of a loan. You loan us the money, we perform the R&D, and at the end when we are reimbursed from the incubator you can EXIT or perhaps buy equity (i.e. replace the debt the LLC owes you with equity shares). Whether we formalize it as money-for-equity or loan, this deal guarantees your money back. Although there is no collatoral (so it's a form of investment anyways), but the incubator is a governmental entity anyways that supposidly will pay us back.

      I can share more details upon request (this is the first time I get on this forum). Any comments please send to