Comment by themgt | Hacker News Reader

Comment by themgt | Hacker News Reader

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That week was fraught, as it was the week of a major conference that we were working with. It was the first time we were displaying adverts on someone else’s site through our system, but we couldn’t trust Simon — we had no guarantee that he wouldn’t try and display something malicious.
We had to rebuild the ad system from scratch to ensure that no one could maliciously inject adverts onto our system. It was too much of a risk to leave it in the control of Simon.
Once we got control over the ad system we realised that the adverts were affiliate links, i.e. not unique to us. The companies advertising had no idea they were advertising on our site. We had no relationship with them.

It slowly dawned on us that the financial forecasts we were basing the raise on were useless. It was based on information from Simon on adverts that were not real, and deals that did not exist. The financial model was broken.

I'm sorry but ... what? They ran a company for "a couple years" with at least a handful of staff, and let this one guy come in and overnight effectively take over an utterly critical part of the business even though "He hasn’t paid any of his invoices. We were expecting around £25k from him"

And then they depend on the same individual both to finance and to provide the financial forecasts justifying their must-have funding round, and after it blows up they say "we didn’t see it coming"

AND they forgot to discount his invoices until right at the last minute.

I respect the author's transparency but there are a huge number of lessons to be learned here before jumping head first in to any other new business startup that relies on other people's money to launch.

On their about page

"In 2015, Reframed.TV exceeded investment expectations with no commercial revenue."

No details of the metrics but that itself would be an interesting post considering the staff numbers and investment.

I can't reconcile that dubious claim, either.

Based on the post, it appears that management didn't have basic financial skills.

We raised on engagement rate and having SEIS protection made it a lot easier as it is less of a risk for the investors. (As we found on the next round we needed commercial traction for EIS raise) Our valuation was £1.1M post and we had people viewing videos for on average 20minutes, in many cases (such as Prime ministers question time videos) people watched and engaged for twice the length of a video.

It was a neat 'feature' rather than a business we found and created far too many passive users rather than active users

absolutely - we have taken a huge hit. We made a lot of mistakes. Our next project we are building MVP but not looking for investment to launch it

I should point out that I've made numerous mistakes too! Just fortunate that it was only ever my money on the line. Again, respect for your transparency - takes balls.

All the criticisms in and under your post are valid, but should be taken in context. If you haven't started a company and raised money for it, I can tell you there are a staggering number of ways to make mistakes.

I asked investors for references and actually called them before signing, but at the same time no doubt made mistakes that others wouldn't have.

The takeaway should not be these these guys were stupid at finance, rather that all critical decisions should be vetted by an adviser with expertise in that area.

There are a staggering number of ways to crash a car, yet driving with a blindfold doesn't absolve you of culpability there either.

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