At 24, Jared Pillai has learnt about the pitfalls of finding funding the hard way. He’s bootstrapped his business (the manufacturer of toddler products), endured countless ‘nos’ from investors and learnt a few hard lessons to boot, but in true entrepreneurial style he didn’t give up, and is seeing his vision come to life as a result.
How did you get the TodPod idea off the ground?
I didn’t have the half a million in capital I needed for tooling, so I knew I needed a prototype to attract investors and distributors. I left my job at Bumbo for a more flexible working environment.
The salary was better, which meant I could save more, and the company knew I was launching a business on the side. It took me a year to develop the business plan and fine tune the product idea, and I used my savings to pay Lambert & Lambert to evaluate the product. They said it had market potential, but needed more R&D.
What was your next step?
We needed a prototype — you need to see the product in real life to find all the problems and improvement points. I found a designer who creates baby products, and paid him an R8 000 deposit to start on the prototype. Meanwhile, I approached the IDC for funding.
This was a long process of documentation, processes and getting my tax clearance in order, but they eventually gave us R300 000 in funding for the prototype.
Was this enough to get your business off the ground?
It wasn’t, because we haven’t actually received the funding yet. It’s been the biggest lesson I’ve had to learn to date. The designer we are working with doesn’t have his tax clearance certificate, and the IDC won’t release the funds until he does. We never thought to check.
My brother, Joshua Pillai, and I have had to self-fund everything, dipping into savings, taking out loans, leveraging loans we already have and maxing out credit cards to make this work.
How much have you spent to date?
We’ve already spent well over R300 000. Prototype costs have been compounded by making the right connections: I’ve travelled to Germany twice to exhibit at fairs and discuss the product with distributors, Hong Kong once to cement a deal with a manufacturer in China, we’ve created a prototype — these costs add up.
And I was always very aware that I could only bootstrap the business so far; we needed an investor.
Have you found an investor?
I have, and he has invested substantially in the business, but it didn’t happen overnight. I approached AngelHub, SeedEngine and the IDC’s venture capital division, and they all said the same thing: They liked the idea and saw the potential, but weren’t willing to take the risk.
Never say never
One of Jared Pillai’s talents is focusing on a goal and then finding a way to see it through. From getting his prototype manufactured to finding an investor, hearing ‘no’ just means a lesson has been learnt. Pillai also set his sights on becoming a Big Break Legacy contestant — and is one of this year’s 12 finalists.
The show launches on SABC 2 on 17 August 2013. Visit big break legacy for more information.
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