This week we obtained a Letter of Intent from a major reputable corporate financing firm in Stockholm. Their intent is to raise upwards to €5 million in new funding for Mowjow, to help us launch the game to a worldwide audience and get listed on the Nasdaq First North stock market.
This is great news and marks a new era for Mowjow.
Our belief in the concept has finally paid off. Thanks to our hard work in improving the game; the potential is now also being recognized and shared by experienced and professional financiers.
Please allow us recap our story of raising capital, as well as tell you about the plans ahead.
When Mowjow was devised in its current form in early 2013, the initial capital came from its founder. The risk was humongous, but we believe it was money well spent. Despite many stumbling blocks we did a good job of creating an initial concept and we are proud of the work we did, though we still had a long way to go.
A major success factor for startups like Mowjow is access to capital. The landscape never fits the map; road bumps will occur. Therefore, cash is necessary to deal with these.
To raise additional seed capital we created our own crowdfunding campaign. The campaign became extremely popular and we attracted more than 400 investors. By the end of 2013 we had raised in excess of €1 million.
The journey didn’t end there though. We continued to attract new investors and Mowjow currently has 500+ investors who have invested more than €1.5 million in crowd capital.
This first part of the story of raising capital was a crowdfunding success story.
The second part of the story included some challenges and delays; the map didn’t fit the road. This naturally drained our capital resources, but we managed to keep going; continuously improving the concept and the technical aspects behind it. This was much thanks to new investments sought from existing and new investors.
In May this year the founder injected another €200,000 in order to complete the new prize concept. Being the founder and the principal shareholder involves a great deal of responsibility and desire in making Mowjow a successful venture. The financial commitments also proves this point.
And that’s pretty much the story up till here. The gaming market is red hot and we have a fantastic and well tested concept to launch. Things are looking good.
Launch + Listing
We will launch the game on the market when the financing has been completed; this is expected to take up to two months. The launch will be followed by a listing on the Nasdaq First North in Stockholm shortly thereafter. Listing on the stock market is set forth as a requirement from the financing firm and will put us in a great position to take the company forward.
Our efforts as a team - shareholders and team members - have brought us to where we are today: on the verge of attracting upwards of €5 million. With our freemium business model we need to invest substantially in free tickets and prizes to kickstart the “snowball,” so this is a huge milestone for us.
For our existing shareholders this infusion of capital and the listing means that the value of your earlier investments will increase significantly.
We are sometimes asked about dilution. Dilution is when the company issues more shares and the existing shareholders’ percentage of ownership decreases. Dilution is a normal procedure for most startups seeking growth capital and is definitely not always an adverse thing for existing shareholders.
With the final terms still to be concluded, we cannot divulge any details now. However, all of us will necessarily be mutually diluted considering new capital, reserves for future option schemes, as well as the public listing.
Will that hurt? Not necessarily. As far as your shares are concerned, your eyeballs should be on their value, not the percentage of the company. When we issue more shares, those shares bring in sought after capital, which in turn is used to increase the value of the company and your shares. This will hopefully bring you a great profit by the end of the day. Without further investment and, hence, dilution, that would not be possible.
The upcoming funding and listing processes will also require a lot from our side both in terms of work and capital. To facilitate the initial phase of this, we will give our existing stakeholders - and their friends - the opportunity to purchase more shares in order to take part in this next valuable phase.
This offer will be limited and will be released next week. Stay tuned.
We are now in a very good position to reach success together. We are all grateful for your continued support - we could not have done it without you - and hope you are as excited as we are about this turn of events!
All the best,
Executive Chairman & Founder
This newsletter was originally published on September 4, 2015.