The world of fintech is taking off. Nexchange hopes to bring it to the next level with “a social network connecting the entire financial services industry,” according to Juwan Lee, the founder and CEO of Nexchange.
Financial services professionals are the main audience for Nexchange. The most crucial networking elements have been identified and put in one place with Nexchange. Distractions like noise are reduced, if not eliminated, with the platform Nexchange will soon provide.
Check out the video and transcript of the interview with Juwan Lee below for advice regarding fund raising, overexposure and reducing legal spend.
What is Nexchange?
JL: Nexchange is a social network connecting the entire financial services industry. It brings content, connections, and chatting in one app.
What makes Nexchange different?
JL: Nexchange solves a problem that, social networks today are generic, and that financial services professionals want to network with other financial services professionals.
The problem that we have today is that there is a lot of noise with networks and that whenever you look at your contacts it’s various different industries. But people from financial industries want to connect with other people in the same industry.
What stage of development is Nexchange?
JL: We’re at the point where we’re about to drive revenue in the very near future.
What stage of funding are you at?
JL: Well, at the point right now. We’re at the seed funding stage. We’ve actually have already done an angel round and we’re about to close seed funding. And the reason we decided to go for external funding is primarily based on the fact that eventually we want to go for institutional capital. Our current investor base, largely of family office, high net worth, and also a VC. It actually illustrates to the investment community that we have not just ourselves, who are invested in the project but there is support from external investors. They’re very important in terms of the next round which will be a series A round. And that series A round will be largely institutional investors.
What have you learned about fund raising?
JL: There’s a lot of things we’ve learned about raising capital. First and foremost, when I look back and see what was successful and not successful. Success come from, when I actually got an investor, it usually from people I already knew. People that knew my background. Or from a very warm introduction where the person introducing us to the capital was very successful or had a level of credibility. What really didn’t work for us is going to conferences and cold calling people and just meeting people randomly and with any real introduction. It’s very important that we learn when you are actually pitching in front of any investor that you don’t have to explain for five 10 minutes why you are in the room. That’s already been done for you. That you’ve really talking about the investment case, so if you don’t really have a warm introduction, or if they don’t know you very well, you’re probably not going to get the capital.
Any words of advice for others?
JL: There’s a lot of things we’ve learned and so I think the best thing I can give advice is, you should always raise more capital than you need. Whatever amount of money you think you’ll end up be raising, whatever commitment that you get. You probably won’t get all of it. So you always need to over raise.
Also I think you need to be very focused. Don’t go after every meeting but focus on the few that are very important. Because majority of the time, you’re not going to get the capital. So it’s important to focus on the high probability scenarios that don’t waste time with meetings and don’t overexpose yourself because overexposure is also not a very good thing.
What about Dragon Law
JL: The reason we use services like Dragon Law is actually very important in the very beginning stage of a startup. First and foremost when you look at all the cost, it’s going to be largely people. And the biggest surprise you’ll see, and an unexpected cost, is legal costs. So what you really need to do is focus on how to bring the cost down. There’s very simple things which you need legal advice for. You don’t need to spend outrageous sums of money for those things. Forms and trade marks, and things which are much more, I would say, high-end legal services can be done with services like Dragon Law which doesn’t cost a lot of money. This is very important in the very beginning stages because you really need to focus on how you’re going to get the most out of your dollar. And I believe that it’s really about focusing on the lowest amount of legal costs in the beginning.