12. On Selling Money: let the rubber hit the road

Dear Co-creator;

Dogmas take hold because of heuristics. Some such dogmas stand the test of time and have incredible Lindy. Some are fads and die a quick death when next such fad comes along. Dogmas are instituted by the victors, the popular ones, by those who have the reality distortion fields. Victori sunt spolia.

You’d think I’d take down a big dogma such as, say, organized religion, after that opening. No, ma’am. I want to take down the “investor deck.” The current lingua franca of entrepreneurship, the blood that supplies the value chain. Yes, the fookin’ deck. 12-slides, big fonts, YC style, Seth Godin induced, blah blah. You all know it. I know it. Heck, I give lessons on it. I give a deck lesson by using a deck, selling my fake deck-creation business. Wanna check it out? DM me baby.

No, sir. I hate that sucker. I like the Bezos-style 6-page brief. Well thought out, well put narrative. To be read in 10 minutes in complete silence. To be contemplated, not pitched to.

Not the fookin’ “I am the Uber for X- bullshit-stylized-dogmatic-hetero-normative-cottage-industry-one-size-fits-all-mind-numbing-at-best-beautiful-looking-with-your-name-always-in-upper-right-quadrant-on-the-competition-slide­-soul-crushing slide deck.

(Honest question, does your name go to the upper left if you craft the deck in Arabic?). And, yes, PowerPoint should be banned (as they are at Amazon and LinkedIn), it dumbs down human existence. Luckily, soon, PowerPoints will be created by AI for the dumb humans.

Now that I have de-stressed myself by dissing on something, let’s get to business. Here are the parts of a brief on what appears to be a workable idea. This is important so help out. Give me comments in Slack. Send me an email. At the very least join the Go/No Go Decision here:

Overview, Story and Value Proposition

SCFO sells entrepreneurs MONEY faster, better, and cheaper. It is a “discount seller of fine money😉.”

Yes, you buy money. You pay the discovery cost, preparation cost, financing cost with your TIME, ENERGY, EXPERIENCE, and with INTEREST, EQUITY.

1. If you are just starting out, you can’t even easily find the money to buy. Investors are extremely selective. If you find the right investor(s) after months of hassle, then you pay equity to buy their money. With SCFO, you can do so much better.

2. If you are already buying money from a bank or lending institution, you can always buy it at better interest rate if you know where to look and how to present with SCFO.

3. If you want to sell your company (eg. your final buy of money by selling all your equity), you can reduce almost all the transaction costs and get the best offer with SCFO.

SCFO gets money to enterprises from financiers by silently, algorithmically, and tirelessly working as a strategic CFO who is always talking to financiers in the language they understand utilizing your data.

SCFO starts working with you on day one. It looks at your financial situation and gives you world class advice as a strategic CFO after spending some time interviewing you and getting access to your “numbers.”

Often times it quickly finds ways for you to either increase your revenues, decrease your costs that also includes decreasing your cost of capital.

Finding you money to buy is where SCFO excels: whether you need financing for new investments, working capital or even selling your business, SCFO will find it for you easily, with minimal effort on your end and with no upfront cost.

SCFO creates financials, valuations, credit scores, any other “finance” metric that pass even the most stringent due diligence just by interfacing your accounting software (if you have it), or directly with your bank. SCFO is already integrated with the work flows of financiers and administers most of the work for the transaction.

Competition and Use Cases to Focus in the Future

1) EQUITY FUNDRAISING (Regulation A+ Mini-IPO and https://startengine.com)

Equity crowdfunding is a popular method for global startups to raise money in the United States. JOBS Act provides a legal framework for raising up to $75m directly from the public by qualifying the shares with the SEC. Some companies use portals such as StartEngine which just bought SeedVest.

But most companies do not utilize this exciting route to financing due to its initial legal and accounting costs (~$100k) when they need to raise more than $5m. Moreover global companies at a significant disadvantage at being selected when they apply to StartEngine.

SCFO reduces upfront costs to negligible amounts and provides not only legal and accounting work for the companies, but also marketing help and infrastructure for successful financing in their mini-IPO.

2) DEBT FUNDRAISING (Short Term Lending and https://quickbooks.intuit.com/accountants/products-solutions/quickbooks-capital/)

QuickBooks Online is an industry standard with more than 5 million users and customers worldwide. If you count QuickBooks Desktop users, that number rises to 8 million (with more than 3 million users worldwide, Xero is popular but not as ubiquitous as QuickBooks Online).

QuickBooks Capital is a lending product which helps small businesses in the United States. It works seamlessly with QuickBooks and helps small businesses in acquiring peer-to-peer loans, long-term loans, short-term loans, etc. Businesses that are connected to QuickBooks for at least 6 months qualify for loans. Debt history is checked before getting approval and some industries are prohibited from getting approval from QuickBooks Capital.

Additional to the core accounting app most of the small businesses connect their credit cards and bank account so QuickBooks Capital has a comprehensive picture of financial transactions. QuickBooks Capital gives access to small businesses for the open invoices credit and the product is powered by data and artificial intelligence (AI) which makes it efficient and popular. As the platform is automated, QuickBooks Capital provides its own customers with an opportunity for growing businesses to access the capital easily.

SCFO can do what QuickBooks Capital does globally, at better rates, and without being locked in to an accounting platform.

3) M&A (Mid-to-lower market M&A transactions and https://masouken.com/en)

M&A Research Institute of Japan has been exceptionally successful as a $1bn M&A broker/marketplace since 2019 for their AI matching algorithm to search for potential buyers, and thereby foregoing any upfront fees for the M&A matchmaking. This makes it possible to search for potential buyer companies efficiently and comprehensively.

Adding a layer of legal and accounting framework to decrease due diligence and overall transaction costs, and globalizing the AI-powered M&A marketplace, SCFO can achieve similar success elsewhere.

4) EQUITY OR DEBT (Commercial Investing that cares about impact and https://www.ifc.org/en/home)

A strong and engaged private sector is indispensible to ending extreme poverty and boosting shared prosperity. That's where International Finance Corporation, part of the World Bank Group, comes in with more than 60 years experience in unlocking private investment, creating markets and opportunities where they are needed most.

Unfortunately IFC cannot do a good job at lower levels of financing due to the high costs of commercial due diligence. 100 hours of due diligence does not justify a $5m investment whether it is debt or equity. I know because I worked there.

SCFO can lower this due diligence burden significantly while also providing financials and impact metrics reliably.

DFIs collectively invest billions of dollars per year but have no real direct investments at the lowest levels of funding needs. Helping them do their jobs better is immediate public good. FYI.

Next Steps

We will build an MVP on a particular sector / use case and go chase clients. Easy peasy.

Warmest regards, O.

PS. Is the “AI Chief Financial Officer” creation by Bing displaying some bias?

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