

Our Client Investbay Raised 800,000 Euros
5th August 2024
One of the many reasons we enjoy working with startup entrepreneurs is because they are visionaries. They see the world in ways that most others don’t, they find potential in ideas that most others would never consider, and they never give up on their dreams regardless of the challenges that lie ahead. That’s why they come to us, so we can use our expertise to help them build the perfect pitch and make their startup dreams a reality.
Our client InvestBay is a fantastic example of how, when an entrepreneur totally believes in his groundbreaking vision and assembles the perfect team of co-founders around him to make that vision happen, the results can be incredible.
We recently sat down with InvestBay’s CEO and co-founder Daniel Rajnoch and CIO and co-founder Andrew Thompson to find out more.
Related: How to Raise Investment – 10 Top Tips That Secured £40M
Introducing Investbay
InvestBay is a tokenization platform which has made investing in real estate accessible to everybody through an ingenious combination of blockchain technology and fractional investment. Now, thanks to InvestBay’s pioneering combination of tokenization combined with their own payment card system, it is possible for anyone to invest in a diverse and increasingly global range of real estate opportunities that, until InvestBay came along, were beyond the reach of most potential investors. While InvestBay’s payment card gives investors immediate hassle-free access to their funds, their lending platform gives investors the ability to explore new investment opportunities and diversify their portfolio, regardless of how much capital they have available.
Bottom line? InvestBay are turning real estate investment on its head and levelling the playing field so that investing in some of the world’s most top-of-the-line properties is something everybody can do.
It’s a revolutionary concept which, like all revolutionary visions, hasn’t been without its challenges.
How Much Have Investbay Raised So Far?
Daniel initially raised 160,000 euros through bootstrapping. Then, after we helped Daniel and his fellow co-founders prepare for their first main round, they raised a further 800,000 euros through an accelerator and angel investment. We are currently working with InvestBay again, assisting them in the preparation of materials for their next fundraising round. InvestBay’s target for this upcoming fundraising round is three million euros.
What Is Investbay’s Origin Story?
The seeds for InvestBay were planted during a walking trip Daniel took with his children.
DANIEL: “I was walking with my children and thinking how great it would be to have an island in the Maldives where I could build a resort. Then my thoughts turned to how I could get the money to invest in the resort, and that’s the idea that started the journey.
“But, even before that happened, I’ve been involved in gastronomy ever since my father became the chef of a hotel when I was a child. Those various pieces of thinking suddenly came together – the island piece, the gastronomy piece – along with the advice my father gave me that the best kind of investment is in real estate. That led me to wonder how I could help people who don’t have big financial resources best use their money to invest in their own dream property, so that real estate investment could potentially be within everybody’s reach.
“That is how the main idea for InvestBay began, but I knew it had to be done step-by-step. So I researched the technology side and the legal side and I put together the people – Andrew, with his extensive real estate experience, Lukas, who is the marketing guy, and Jirka, who is the technical guy, and we started to build. We immediately saw that what we needed was similar to using blockchain technology, allowing you to fractionalise the small pieces and invest in selling the tokens. That is why we use that technology. One day after another it slowly came together.”
What Is Investbay’s Unique Selling Point?
ANDREW: “There are several. The first one is, InvestBay was conceived as a global company. A lot of our competitors, whether they’re active in Dubai or the US or elsewhere in the world, tend to be located solely within their market. That’s not to say they might not expand but it’s harder sometimes to build a company if it wasn’t originally conceived to be global.
“Our second USP is that we’re using tokenisation as a method to fractionalise the assets. Not everyone does that. The logic for that is we think there will be a lot more investment happening in tokenisation because a lot of the big institutions are heading in that direction and seeing it as the future. And that’s important because one of the challenges of real estate is it’s and not easily converted into cash. It usually comes in big chunky pieces and you need a lot of cash to buy and sell. Our whole principle is we’re aiming at retail investors, smaller investors, and if they have the tokens they can buy and sell their tokens on those secondary exchanges. We think there’ll be a lot more of this kind of joining up of these exchanges in the quite near future, so InvestBay was built for a broader horizon of investors.
“Our third USP is that, on top of real estate, we’re focusing on a ‘b’ sector which is vacation rentals. In principle we could be sector agnostic, but we found that a major USP was vacation rentals. Right now, every time you book a hotel or a vacation rental apartment about 18-20% of what you pay usually goes to an OTA like Booking.com or Airbnb. We thought, “Hold on, since we’re building a community of investors, of token holders, across all of our properties, why not give a direct booking for those guys who are operating those individual properties and cut out the OTAs?”
“If you look at the hospitality forums, everyone’s talking about how to reduce the reliance on the OTAs and reduce the fees and everything else. OTAs are very powerful across the hospitality industry and they provide a lot of benefits but there are also a lot of challenges that come with them. So we have basically an API link between our investment platform and the operators website so we can basically cut out the middle man and give a discount back to our own investor community. That’s an interesting kind of USP.
“The fourth USP is one of Daniel’s ideas, an asset-backed payment card using the real estate investments as collateral. That’s a future generation of this project we’re looking towards.”
DANIEL: “Our strategy has always been that our clients should have easy access in and easy access out of their investment. There’s also the element of having an emotional connection with the properties they invest in, especially with vacation rentals where you can actually go and stay there, which is really different to pretty much every other media that’s previously been available to small investors.
“Our clients like the possibility that they are investing in their own property. Other funds, where you invest in a platform that owns several properties but you have no choice about what properties you’re investing in, don’t have that emotional and tangible side to them. With InvestBay, even if they’ve only invested 100 euros, our clients still feel that it is their property. Our research has shown our clients like the possibility they are investing in their own property.”
What Are The Biggest Challenges Investbay Have Faced?
DANIEL: “I would say the biggest challenge was the regulatory perspective. The current regulatory situation is changing in continental Europe so we had to choose the right time to be on the market. That, in turn, opened up a big change in thinking how the digital changes in regulations can open the doors to other regulatory partners like banks, investment funds and so on.
“And then there are the legalities. You have to find the right legal set-up and you have to really stick with it, you cannot change anything on the business model. If you do, there’s the risk that moving one piece will send all the other pieces falling over like dominoes. That has been a challenge as well.”
What Are Investbay’s Biggest Achievements?
DANIEL: “We have sold our first property, we are currently halfway through the sale of our next two properties, and we are about to launch half a dozen properties in different locations, including Spain, Tenerife, Portugal, France, and another in the Slovak Republic.
“We also have a sponsor agreement with Mastercard. That is quite a big achievement I would say.
“Also, within our first four months we were able to get nearly two thousand registered customers. We currently have two hundred clients who are investors which means we’re growing.
“Finally, the very fact that we have been able to raise some substantial investment, especially given the current market situation, specifically in this region, I consider a big achievement. When somebody wants to invest in your business, and especially when you finish a fundraising round successfully, it’s a good confirmation you’re doing the right thing.”
What Was It Like To Work With Robot Mascot?
DANIEL: “When I was initially researching how to fund-raise, I found James’s book, ‘Investable Entrepreneur’, and attended his webinar. If you want to be a success you have to prepare the proper material to have a professional start, and our business model is quite complex. It was important to work with Robot Mascot because they are professional and knowledgeable and they guided me well, helping me to finalise the documents so that everything we needed for our round was as perfect as possible.
“Robot Mascot are well structured, well prepared, and they have principles. They have so much experience and expertise in creating business plans, and we are looking forward to working with them again to prepare the materials for our three million round. We trust James and Nick at Robot Mascot to help us do that.”
7 Tips From Daniel And Andrew On How To Raise 800,000 Euros
Dream big
DANIEL: “Don’t be afraid of the big targets because if you see the big dream you will do everything on the path to get the dream. If you make it small you will choose all the stuff you need to make it a small dream. But, if you make a big dream you will choose different tactics, goals, people, and so on. It’s easy to be afraid of dreaming too big and rein yourself in. Don’t be afraid. You can achieve big dreams and big targets if you structure them carefully.”
Careful campaigns
ANDREW: “Be careful of how you set up the campaign from the start because if you get it wrong it can hurt you badly from the fundraising perspective. You can easily kill the future of a startup right from the outset, so take your time to find the right people, get the right advice, and make your offering as solid as it can be.”
Believe
ANDREW: “Have total passion and belief that you’re going to achieve your goals. That’s what Daniel brings and there’s no way we would be here without that.
“Don’t get discouraged because the journey will be long and winding and you’ll have plenty of hurdles to jump over, traverse, or navigate around. The challenges add up and they can weigh you down. Focus on your goal and keep going.”
Be ready for change
DANIEL: “Always be ready for change. Be flexible and responsive to change, because change will happen and be necessary, and it can be expensive if you’re not able to adapt to it quickly. By the same token, hold onto your money for as long as possible so it gives you a long runway to your long-term vision, for example, be creative with the deals you make with your suppliers. Be smart with your money.”
Be organised and proactive
ANDREW: “Being organised and proactive within the different sub-structures of your business is super important. When it comes to securing investment, everything has to be really organised. You’ll end up with a lot of files very quickly, so make sure you stay on top of them.”
Nail your cap table
DANIEL: “A word of warning I would give is based on an experience I had with another campaign. In that previous campaign, we had structured the cap table wrong, and then we had difficulty restructuring it because one of our angel investors (who basically became a ‘devil investor’) had lots of rights for only 10%. This was a very bad mistake because when we had an offer of two million euros on the table from another company we couldn’t take it because the ‘devil investor’ wouldn’t approve it. He wanted to change his shares to golden shares and the situation became very bad. From then on, I have taken much more care about how the cap table is structured.”
UP NEXT:
How to Raise Capital for Business: The Most Effective Methods & Processes
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