How to raise funds without knowing anything about the business.
At the end of 2007, the project to create an affordable private jet airline is launched. We still have to raise funds.
Money is not a problem
It’s a sentence I always repeat to myself: with a great project, you can find all the millions you want (it was the case 10 years later, with my hotel, which I’ll talk about later).
In the case of Wijet, obstacles arise. One of the first investors we meet is ready to follow us for €10K. We’re still a long way from our goal! We’re thinking of raising €1.5M.
For months I will send emails to a hundred investment funds, have hundreds of meetings. Always the same answer: come back when you have a plane and you are profitable.
The wheel of fortune seems to turn around at some point: one after the other, Tikehau, the fund for which Mr A. works, announces that they’re ready to follow us for! Shortly afterwards, Alven¹, another fund, said they’re ready to co-invest €2M as well. We think that the plane will take off the following month.
And then nothing; both retract.
The team is getting smaller
F.G. and I are a good team. We work every day in my apartment on Boulevard Saint Marcel (there was red carpet in the room: when we walked over with white socks, they came out red).
After a brainstorming sent to some friends, we now have our name: Wijet. We buy the domain name for $200 (initially $2000, we negotiate by saying it will be for a student blog).
We register the brand, and Nokia takes action against us right after. We hire our first lawyer who advises us to focus our brand on certain services (aeronautics); the matter is settled.
However, F.G. is absent more and more regularly without notice. He’s less motivated. After discussing with him, we decide to split up; without much impact. In fact, the project didn’t exist yet, and yet, the risks became real. It was no longer a student project.
Mr. A. and I are both looking for funds.
2008 is the beginning of the crisis. People think we’re crazy. “Do you read the papers?”
Another major obstacle put a strain on our team. If Mr A. knows investment funds well, neither he nor I are specialists in aeronautics. During a meeting with an investor, I start talking about the plane’s pedals², and Mr A. starts laughing: “but there aren’t any pedals in a plane!” Yes, there are…
Lack of credibility.
A first quote at 40k€ and no plane
At the same time, I create a quite simple website: a small tool with departure/arrival date, and a price that is displayed (this website was just a simple scenery: we didn’t have anything). Few companies have one; the website is quickly well optimized for search engines.
This website brings me a high-profile contact: Mr H., retired pilot of the air force. He’s interested in the project.
We meet at Café Mode (one of my favorite places, that closed shortly after my dismissal); I explain to him that it’s still only a project, that there is a lack of funds… Bingo! He joins us. He will be in charge of the whole operational side (especially the writing of the operations manual, +1000 pages).
Our team is becoming more credible.
Thanks to this website, I receive in March 2009, a quotation request for 40 flights around the Mediterranean area. I send a basic estimate (Excel table, no logo, no SIRET: the company did not exist yet). A few days later, we get an answer: we have our first signed agreement!
This is a crucial step in our fundraising efforts. Now, when we meet investors, we can tell them: see, without planes, without anything, we were able to sell. We have a first flight and our first revenue.
After a quick domain name search of the email address, I realize that the request comes from Laurent Wolf’s manager, who’s taking care of his European tour in nightclubs.
I want you to be the CEO
We have a first quote, but on the financial side we’re starting to be short.
For 6 months, Mr H. has been working with us for free; his pension is no longer enough to pay his expenses. On my side, I blew my 50K loan. Against Mr A.’s advice, I write a cheque for €1,000 to Mr H. while I’m already overdrawn. A month later, same again and second check.
The bank starts calling me several times a day.
Fortunately, a meeting is coming. Mr R., private banker, puts us in contact with one of his clients, Mr C., co-founder of ABC arbitrage3. He’s thinking about buying a private plane or even investing.
We meet him for lunch. He says to Mr A.: I don’t understand what you’re saying; what Corentin says, I understand; if I invest, I want him to be the CEO of the company.
The crazy week
Next week’s gonna be crazy.
When I walk into his office at Bourse, he’s reading the Commercial Code, with both feet on the table; he’s keen on regulations and laws. Every day he asks me a question I can’t answer; I come back the next day with a very partial answer.
He taught me a lot; he gave me the desire to learn taxation, governance, fundraising structures…
On Monday, he plans to invest €20K; at the end of the week, he is up for €400K with a discount on the valuation of the company (for an investment in debt, in return for S.W.4)
This is insane.
We’re still € 1.1M short, but this first investment will already get us back on our feet.
THIS EPISODE IS PART OF A SERIES OF ARTICLES ENTITLED: “THEY DIDN’T THINK IT WAS IMPOSSIBLE, SO THEY DID IT.” YOU CAN FIND ALL THE ARTICLES BY CLICKING HERE.
¹Alven is a French venture capital company
²The pedals of an airplane are called the rudder pedals. They act on the rudder, it is the yaw movement, and the wheel brakes.
3ABC Arbitrage is a company specialized in designing arbitrage strategies in most European and American financial markets.
4S.W.: The Subscription Warrant is a financial instrument (transferable security) that allows the purchase of one or more company shares at a specific price (known as the “exercise price”) and until a certain date (known as the “maturity”). This instrument is often used in startups.