Factom my reading12 Sep 2019 11:57
The Series B fundraising expected by Factom in 2018 has not yet closed and, despite continued engagement and support from FastForward, remains uncertain. (He has no option other than to say this...it’s not closed, it’s dragged on for over a year...so yes he has to use the phrase uncertain)
I have been working with the management of Factom and potential investors and partners to try to structure an approach that will provide both continued funding for Factom's current operations and a means to develop the company further into a profitable business for the future. At the time of writing, this remains a work in progress, with varying levels of success and engagement from Factom. Recognising this work, we have agreed an extension to the terms of the SAFE note which is clearly in the best interests of both FastForward and Factom. (This is a real positive...why bother if it’s worthless)
Whilst we have not impaired the valuation of either our shareholding in Factom or the $6 million SAFE note we still hold, there is much work to do to bring Factom's product offering to a point of profitability and so generate a return for us as investors. (Factom still doing POC with various potential customers...it takes time for adoption of ultra new tech...like it or not)
It may yet not be the success story we first thought it, but we continue to do all we can to assist Factom in their development and protect our investment.(again has to say this due to not being able to upgrade the value due to series B not closing)
There is nothing in Factom from the above that’s worrying...we’ve been discussing this for around 6 months...if investors are putting in major money into series B they need it to go beyond POC
Note as a rule to achieve series B companies generally need to show they are a fully operating business that is producing PROFIT.
What did Factom need to achieve to close Series B?
2 things..
1* build the Software-as-a-Service (SaaS) platform to be efficient and responsive to scale customer growth
2* accelerate the product roadmap to deliver more product features and increase revenues.
Once they achieve these goals then series B closes.
Yes it has been slower than we all expected and Lorne has been ultra honest in his assessment...Factom hasn’t as yet achieved the above.
It is a huge step from that to total failure as the deramp crew and sellers would suggest.
Factom was a scratch company built bottom up and have achieved remarkable things in a very short period (business time rather than punter patience time)
You don’t complete Phase 4 with a US Department if you don’t have a product. You don’t work for years with Bill Gates if you don’t have a product.
They need to prove 100% the product is stable, can scale, increase revenue before corporations will adopt. Expect series B to close in between.
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