Crowdfunding a new venture

Recently, I saw a question posted on the web that was effectively, how do you attract venture capital? One way is crowd funding, and since a venture of mine, Nemidon Ltd, is taking this route starting yesterday, I thought I would depart from my usual posts and discuss this. (This post was originally scheduled for last week, but the pitch apparently had website difficulties, and hence a delay ensued.)

First, how did it get started? I operated a small research company that had a significant seaweed project, and Margaret Holloway (Now the CEO of Nemidon Ltd) approached me and asked could I make a seaweed-based massage gel for athletes. I was offered six attempts. I made best guesses for five, and the sixth was something to make up the sixth. I had a bag of stuff that was a disaster for its intended use and would have been thrown out, except I tend to keep all sorts of oddities, “just in case”. This stuff had the advantage as a raw material that it would more or less do what was required when made into a gel, but had the disadvantage it had to be made, as opposed to being directly available on the market. Needless to say, the clients greatly preferred this one! First moral of invention: a disaster for one application may be highly desirable somewhere else.

The next lesson in venture development was annoying. After optimizing the material to make a better massage gel, it did not really take off, despite having some genuine “big name” support. What this gel did was when rubbed in, it left the skin fresh and well toned, and athletes that used it liked it. But it cost more, and those doing the massage preferred something like olive oil. They had used oils before, and they were in no hurry to change, and what the athlete felt was irrelevant, especially since oil was cheaper. What the ultimate client wanted was irrelevant; what the gatekeeper thought was critical. Nevertheless, a variant of it was found to be an exceptional moisturizing agent, and a number of other products were developed.

The next lesson seemed to be, if things looked good, something bad was just around the corner, but things grew, somewhat slowly, and major fund-raising or floating was scheduled. Then came Lehmans, etc, hence my scathing view of some of Wall Street that may have snuck through in previous posts. Anyway, while the venture continued, somewhat more slowly than it should have, it is now time to move forwards, hence the entry into crowd funding.

What should a venture have to attract funding? The first thing is something that is expected to sell into a large market, and something that differentiates itself from the competition, for there is always competition. It also has to work. Nemidon has a small number of such products. The moisturizer has been shown in University trials to be beneficial, and it works in a different way. Most moisturizers simply block water, and anything else, coming out of the skin; this one maintains a vapour pressure of water above the skin that happens to be appropriate. The polysaccharide is interesting that it easily dries to a certain level, and then it becomes very difficult to make it drier. To get it really dry, it needs about an hour at 180 degrees Centigrade, and if a person is at that temperature, they have much bigger problems than skin hydration. Accordingly, the polysaccharide regulates the moisture, and allows excess to pass out.

Another important point about skin moisturization is why you want it? Splashing water on the skin from time to time does nothing! The reason is that the flexibility of the skin arises from water plasticizing the protein. That is a slow process that involves slow diffusion to an equilibrium concentration followed by hydrogen bond formation, which is why the maintenance of a vapour pressure is so important. If you merely block water escaping, you may end up at the wrong side of the equilibrium.

Enough of the technical stuff. Once we got to the crowd funding stage I had to do a small video presentation. Here is another problem: they want the technical guy to do this, but, as I found, marketers do not want technical explanations from the technical guy. I had thought about this and came up with a demonstration of the need to plasticize as opposed to wet. My tools, partly inspired by Richard Feynman’s demonstration of the Challenger disaster, was a glass of water. However, that was not to be, so I had to make effectively an unprepared presentation, and I felt it showed. If you are interested in this, and you want to see me looking awkward, it is to www.crowdcube.co.nz

What was my proposed demonstration? I had two pieces of oven-dried seaweed in a plastic bag. Take out one and try to bend it. It is so brittle it will crack up. Take the other and put it into water. In a few minutes, it absorbs the water and is quite flexible and leathery. That is the water plasticizing it, and shows why plastering, hence moisturizing, is important. That the water goes in like that from solution is because of the ionic content, mainly sodium, that is absent from skin. Then, I intended to show another piece that had been left lying around rather than being sealed in a plastic bag; it too was flexible, showing that seaweed polysaccharides can absorb water from the atmosphere.

Whether the funds come will be interesting. The delay was annoying because we had promoted it for last week, and when it did not turn up, we must have lost momentum. Still, we shall have to wait and see.

A couple of other matters. On Thursday 11 Pacific time my Miranda’s Demons (http://www.amazon.com/dp/B00ZH851G8 ) goes on a Kindle countdown starting at 99c. Next Monday I shall make a special post of interest mainly to scientists: another cat paradox. I challenge anyone who thinks they understand physics to resolve it. (There are resolutions, but they are uncomfortable.)

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