Wednesday 25th of October 2007
I went to this seminar today, where a gentleman under the name of Theo was presenting a very exciting project.
A unified platform where people would be able to do social networking, buy and sell online, talk via a voice over IP platform, a media platform, he mentioned a new application which links Skype with Msn, yahoo etc( which surprised me ). His main concept came down to the idea of sharing wealth created from the platform among the users, shareholders, stakeholders and NGOs.
He said that he has been developing this system for the past eight years and has raised more than 850k from private investors. He also mentioned that he had used of it until now and he needed money to carry on developing the website. He mentioned various celebrities that were in a way associated to that project (one of his selling points). Theo was selling one share at around GBP 7500 and had only 10 left to sell.
I asked him a few questions, but I was flabbergasted when he answered this one; what are the main risks of this project? “That we never go live”. I would not have liked to hear that if I had invested in the project.
Anyway, I had the chance to chat to some of the shareholders (poor them) who were all very impatient to see the project finally online. They have been waiting for it for years and years, some since 2007. They all seemed very much anxious with the way things were moving (I would have been too), one of them had invested 50k and brought his friends to invest as well. Some of these people even borrowed money to “loan” to this company which after eight years has still not come to a delivery point.
The lesson I learnt in all this is that I was experiencing how naïve people could be while investor such amount of money, in a project that seems so risky to me. Did they not ask the same question that I asked?
Whatever business you do, there is always a risk factor. If you assess the risks at the very beginning, at least you would know what you are liable to lose.
Rajeev Kistoo
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