Letter to Potential Investors

by fbuilesv • 13 years ago

19 36 13 years ago

jpemberthy• 13 years ago

I'm trying to understand the relationship between "Uber for trucks" and software platform, is this just some name dropping to get people's attention?

logicallee• 13 years ago

They're solving the last mile problem recursively. Very elegant.

fbuilesv5• 13 years ago

Hi, Federico (one of the co-founders) here. We thought a lot about talking in terms of Uber (or Heroku in the add-ons part) and we are aware of this fear of name dropping.

The reality is that we think Uber is a whole lot more than a simple "Connect X driver to Y passenger". They've created a mesh of human transport infrastructure that can take you from point A to point B in the most efficient way. Trust me, the technology behind this is not trivial and their system is almost like a living being, constantly changing itself to meet demand. We're doing the same with trucks and commercial cargo. We don't have the "I need a ride now" problem (although we do have schedules to follow) so it makes it a bit easier for us.

On the tech side this means that we have to predict supply/demand for the products we move. We also have to take the 2000+ trucks we have and treat them like a big pool of resources so we can get volume pricing, make good use of deadhead miles (done with location/route info.) and optimize underperforming routes (by getting more customers A -> B/B -> A.

bjfish• 13 years ago

The relationship is that they are taking an underutilized resource (trucks) and increasing utilization through their network much like Uber is filling cars.

The current "our business model" section in the letter is confusing and I think the letter should be more up front about what their value proposition is. I had to read their "nosotros" page to figure it out:

  Más del 25% de los camiones en Brasil, México, Colombia y
  Argentina viajan vacíos cada semana, dejando de lado
  ganancias potenciales de US$4.5 billones cada mes. Nuestra
  tecnología pone en contacto a quien tiene la carga con
  quien la puede transportar, así el transportador nunca
  viajan vacío,...

More than 25% of trucks in Brazil, Mexico, Colombia and Argentina travel empty every week leaving behind potential profits of $4.5B dollars. Our technology puts people with cargo in contact with transporters, so the transporter never travels empty,...

It appears they are filling empty trucks which I find similar to "empty leg flights" which are sold by private jet operators.

mmvvaa11• 13 years ago

MiCarga cofounder here.

Thanks for the feedback, and from a first read of what we do, yes. You are spot on.

We believe we can make use of a severely underutilized pool of resources (empty trucks) in developing countries, some of it as a result of a huge industry that has transformed very quickly to adjust to the organic growth, as well as to other factors like free trade agreements that have escalated the need for transportation companies to be much more competitive in a global landscape.

The same challenges apply to the cargo generators, which have relayed on excel sheets or custom tools to manage their logistics, but that are constantly struggling to find the right solution to manage their specific needs.

I won't bore you with details, but logistics is much more than just putting cargo on a truck (think of security, insurance, satellite tracking, etc...), and we are integrating several services to simplify this for our customers.

yogo• 13 years ago

Thanks. This reply cleared a lot of things up quickly. I couldn't really pinpoint what this company was doing from the copy.

Btw, it was a good read. I'm definitely not the target audience but it kept my interest.

acadavid• 13 years ago

I don't know how successful this public effort can be, but I think it's the first time I see a company using a long-form sales letter to find investors. I'd love to read an update from the people behind the company once they're done with their fund-raising and see what the results of doing this were vs. traditional fundraising.

mmvvaa11• 13 years ago

MiCarga cofounder here. We wanted to tell our story, in a format that suited our position right now. It is an experiment, and we are fully aware that it may not be the right format for every investor. Regardless, we wanted a space to tell our story in more detail, and start better conversations with the right investors.

PS: We will update everyone in our progress.

fbuilesv5• 13 years ago

Hi! This is an experiment we decided to run since we want to get this out to as many people as we can. Our network of investors is mainly based in LatAm and it's too small so this is our way of getting it out to the public.

It's long and detailed because we're tired of "elevator pitches", we want interested people to know as much as they can about our company and what we're aiming for. We feel this is more responsible (you as an investor know upfront what you're dealing with) and it's more time-efficient (we don't have to spend 20 minutes explaining what we do at the beginning of every call (that's actually BS, we still have to do this :P)).

drakaal4• 13 years ago

I don't know for certain, but US Companies can't do pitches this way. It isn't legal. I don't know what the rules are for US Companies investing in Non-US Companies in this regard. But I would do some serious checking. It would suck to raise money only to have the FTC decide you did so in an illegal way and have it disappear.

mmvvaa11• 13 years ago

MiCarga co-founder here.

First of, our operations are mainly in Colombia and Argentina for now, but we are incorporated in Delaware as a C-corp.

Second, as of monday this week, it is legal. You could find more info here: https://angel.co/public

drakaal4• 13 years ago

Not a lawyer, but I don't think you did all the filings necessary to solicit there is quite a bit in your copy I know they wouldn't let fly.

fbuilesv5• 13 years ago

Thanks for the tip drakaal. As mmvvaa points out, general solicitation is now accepted in the US. We have talked to our lawyers and we think we're safe on this side, but if anyone with more knowledge wants to chime in we'd appreciate it.

drakaal4• 13 years ago

Solicitation in the US has to be qualified investors, and only after you have the copy approved by the Gov. It isn't as easy as sticking up a web page, and there are serious limitations to what you can say, and how often you can make changes.

cinquemb2• 13 years ago

Isn't there a YC company[0] doing the same thing who raised a tonne of capital?

[0] https://keychainlogistics.com/

fbuilesv5• 13 years ago

We are in the same space and to be honest we were amazed by Keychain's launch. According to VentureBeat [0], they had 1 in every 500 trucks in the US on launch day (Aug '12). We launched in May of the same year and we know how hard it is to find good, qualified drivers.

Sadly, there's not a lot of public information about how Keychain works so I can't say for sure if we're doing the exact same thing. I do think we're seeing the same problem though: the last big change in cargo logistics was the introduction of containers for transportation (and that was decades ago). We can do better.

[0] http://venturebeat.com/2012/08/21/keychain-logistics-truckin...

yesimahuman• 13 years ago

So, there's a competitor? Who cares? That means the market has validated your product, and now you have an enemy to motivate you.

fbuilesv5• 13 years ago

Hey guys, Federico from MiCarga here. We're happy to answer any questions.

If some of the stuff in the letter sounds familiar it's probably because you've read it before in PG's recent fund-raising articles (recommended reads for everyone raising capital):

* How to raise money: http://paulgraham.com/fr.html

* How to convince investors: http://paulgraham.com/convince.html

* Investor Herd Dynamics: http://paulgraham.com/herd.html

Sujan• 13 years ago

Feedback:

- tooltips on hover over words are confusing

- [...] with projections of 1.2M (ongoing [...] - unit?

- "improve our to integration" - get rid of the 'to'

- letter itself is better written than the summary. maybe rework that.

- don't make something a link if you can't click it to go somewhere

- "Torrenegra Labs" should be linked to their site, I will google them anyway

- "Our business model [...] most generic option." Looks like a quote. Is not a quote.

- "We started this company in November 2011 [...] Today we have [...] We made significant progress during our three month acceleration period: [...]" Jumping around in timeline.

- Then I kinda stopped reading and started skimming because it was so unstructured :/

Conclusion: Nice try, but content and presentation lack polish. The text contains lots of interesting information, but seems very unstructured and follow no clear outline. Add some clear headers and restructure the text, rewrite the summary.

But: Nice product and market!

mmvvaa11• 13 years ago

Thanks for the feedback. We just fixed some of the more obvious corrections, and look forward to discuss the ones that require a bit more time with the people that we speak with (timeline, etc...).

jaredstenquist• 13 years ago

I had the pleasure of being a judge on a panel when this team was pitching 4-6 months ago as part of the MassChallenge incubator program. They are a great team putting together some solid solutions in the South American logistics industry.

I'm happy to see them making more progress. I hope the fundraising is successful.

nthnclrk• 13 years ago

I may be missing something here.

• Launched in May 2012 (but started in Nov 2011)

• Run rate of $88 000

• Gross revenue of $500 000

One of these can't be true.

mmvvaa11• 13 years ago

MiCarga cofounder here.

- We started development in nov '11 and only officially launched operations in May 16th, 2012, to be precise.

- Our current run rate is US$88,000 (as of our latest numbers). Run rate is an extrapolation of the most current numbers, if they are extended for a year.

- So far, we have grossed more than US$500K. I am not going to dig into our margin details here, but yes. We have grossed more than that since we started operations (may '12).

I hope this clarifies it.

Letter to Potential Investors

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