Facilitatr: You Need It, Our Community Gets It

Posted on April 18, 2008
Filed Under VC Insanity |

For some startups, VC money may be harder to come by in Silicon Valley but that didn’t stop Pablo’s Place from closing its $12 million funding round in less than a month. So I’m back pitching another innovative service that square VCs won’t touch but really private equity will.

The Problem

You have money but you need things that are difficult to acquire with money alone. A connection to a counterfeit pharmaceuticals manufacturer in the Guangdong province of China. A customs agent in Berlin who can make sure your package arrives safely. A diamond dealer in Dubai who understands your need for discretion. A border patrol employee in Macedonia willing to look the other way. A government minister in Qatar who sees the value in doing business with your company. A sympathetic judge in Italy who recognizes that you have been involved in little more than a misunderstanding.

In the global economy, there exist middlemen who specialize in acquiring things. They connect those who need certain things and who can pay for them with those who are capable and willing to deliver them. Unfortunately, gaining access to these middlemen is not always easy, especially for those who are new to the underground economy.

The Opportunity

The underground economy is a thriving part of the global economy. It is estimated that anywhere from $800 billion to $2 trillion in funds generated by illicit activity is laundered each year.

Contrary to the belief held by Web 2.0 proponents, not all of the business world is being disintermediated. In the underground economy, the number of middlemen has only increased as globalization has created new opportunities but also added new complexities.

The number of opportunities and players in the underground economy can make it difficult for many to participate. Relationships are required and these are not always easy to develop for obvious reasons.

The Solution

Facilitatr is the first online marketplace that facilitates connections to these middlemen, or “facilitators.” Those in need of specific things use Facilitatr to solicit bids from facilitators who can deliver them.

Facilitatr offers a secure escrow payment service and feedback mechanism to help ensure the integrity of transactions and also provides a privacy layer, ensuring that the parties involved in a transaction never know the identity of the other parties involved.

Facilitatr has the opportunity to create the Internet’s first marketplace for “facilitators.” In doing so, it can reap the rewards of being a key player in highly-lucrative transactions.

Value Proposition

Facilitatr’s value proposition is compelling:

Revenue Model & Financial Projections

Facilitatr earns a fee of 8% on every transaction that it processes.

Facilitatr estimates that in its first year of operation, it will process approximately 1,000 transactions with an aggregate value of $150 million, generating gross revenues of $12 million.

As its gains a reputation in the marketplace, Facilitatr anticipates that by year five, it will process approximately 10,000 transactions with an aggregate value of $3 billion, generating gross revenues of $240 million.

Due to the company’s low operating costs and domicile in a tax-friendly environment in the Middle East, it anticipates profit margins of at least 70%.

Exit Strategy

Who I’m Pitching

The same really private equity guys who invested in Pablo’s Place and Blackmailr.

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5 Responses to “Facilitatr: You Need It, Our Community Gets It”

  1. Ramine on April 18th, 2008 2:52 am

    You know, I think you’re onto something.

    I see more future in this than in most social networking / video sites :)

  2. antje wilsch on April 18th, 2008 12:51 pm

    you need a ‘kill clause’ in there

  3. Brady Brim-DeForest on April 18th, 2008 1:10 pm

    THe big problem is that you are cutting into the Facilitator’s cut. Most facilitators make substantially more than 8% of transaction. That’s what makes facilitation so lucrative.

  4. Drama 2.0 on April 18th, 2008 1:26 pm

    Antje: it’s already there. :)

    Brady: Facilitatr is charging 8% because it’s an automated platform for connecting two parties and the facilitators involved would certainly mark up the cost of their service for transactions that they get through the service.

    Do note that most illicit transactions go through multiple middlemen; there is rarely a single facilitator. Thus, Facilitatr is not be adding an additional layer to the process.

    It’s also worth noting that more intermediaries is also desirable due to the fact that it makes transactions harder to trace.

  5. Cyndy Aleo-Carreira on April 19th, 2008 3:41 pm

    Is legal aid available as an a la carte add-on service?

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