Good news: Comitato Matera 2019 has accepted the second iteration of our Civic Innovation Network proposal. Another piece of good news is the appointment of British-Italian designer Joseph Grima as artistic director. I met him today, and he is a person much closer to the Edgespace than most.
Bad news: MT2019 is in a deep liquidity crisis. They need to solve it, not just to pay us but simply to keep moving. I made it a condition for going ahead with the deal that we receive a substantial advance. So: Paolo is going to engineer some liquidity. Meanwhile we will prepare a contract. As soon as he has completed his checks, we will complete the contract with the dates of the tranches of the payment, sign it and we are in business. Meanwhile, we will make conditional arrangements, telling the key people on the team āif this happens, then we will want to do thatā. Itās like building a big red āstartā button, and pressing it as soon as all the checks complete. He is meeting banks starting Thursday 20th.
Congratulations for finalizing another contract for Edgeryders, Alberto ā as much as is currently possible.
I remember the name of Joseph Grima from Ilaria telling me ā excitedly ā that sheāll have a job as his assistant in Matera now. Edgeryders everywhere
I think this is an indication of where the future lies, so the more creative solutions and workarounds that can be found for getting things done in a cash strapped Europe, the more useful an organisation Edgeryders is. Well done Alberto for making this happen.
50% (about 16K ā¬) in June Let's say the end of June, to be on the safe side.
50% at the end of the project ā this means invoicing in December and being paid on March 1st 2015.
They are good people, but the administrative environment is bureaucratic (Italy) and not very stable.
Please note that this means turning some of the stress over to the people we hire: āWeāll pay you when they pay usā etc. It also means ācash flow is kingā, which puts additional work onto Arthur. But in fairness, this is true of all businesses and we knew that.Ā This is another watershed: even just to manage STF we are going to need to monitor cash flows very very carefully and anticipate crises. If itās time to pay a collaborator (also a community member) and we have no liquidity, we risk damaging a precious relationship and spreading bad vibes. The role of Arthur is absolutely strategic, and he needs to sleep with his eyes open until we become a mega-wealthy corporation that prints its own money So I want you all on board, all for one and one for all.
Do we say yes or no, under these conditions? [ArthurD]?
thanks Alberto, I guess itās a yes for me, but I am in the dark here as to what chances are there for us to get other contracts this year as well, with better terms, which would allow us to say no easily.
This is like a large-scale freelance contract, and thereās always crises in freelancing. I know that Iād expect this contract to be paid eventually, but sluggishly (Italian government is already famous for late payment, right?). We agreed initially to not make debt with the Edgeryders company, and unfulfilled cash flow liabilities are IMHO also a form of debt, so we want to avoid them. On the other hand, 50% not too far into the project is not a bad condition, the project fits our sense of meaningful work and intention to of our community to create their own jobs, and we have this community that understands risk, entrepreneurial and precarious work conditions well. So with proper transparency (open accounting anyone?), we hopefully can manage the constraints of this contract. Havenāt done the numbers, though. Everyone would have to buffer their share of the risk ā¦
So Iām ok with this contract if we buffer risks appropriately to avoid the ābad vibesā and unfulfilled promises situations:
we will not proceed with the work past end of June until the 50% payment arrives (this is probably part of the contract already, just want to make sure it is)
also, as much as reasonable: we disperse the risk to manageable packets by distributing the work to more jobs with lower time investment
also, we develop a fair risk sharing mode at the start of the project that applies both to us and our paid collaborators; probably including installment payments
In total, we want to be able to handle the final invoice being paid late by a year.
I am in principle ok with this if we have it in iron clad, canāt be misunderstood communication with people hired that they understand and accept the situation. And that this is a particularly risky contract.
The ācontractā is no longer clear to me and CM keep moving the goalposts.
Alberto submitted a proposal to CM before the end of last year. It was accepted and Edgeryders submitted a highly detailed proposal which was accepted, in principal.
After a gap of a few weeks CM reverted and said
that they did not want to run into 2015 due to an envisaged restructuring and
that they have to competitive tendering for this scale of this proposal which they have no capacity to do.
Both of these facts would have been known to CM from the outset. We have reconfigured the proposal to accomodate these requests and reduced the amount of work proposed.
CM did not have the facilities in place in time for commencment of the unMon and we had to ask them for details about payments and accounting. Their reply was incomplete and has turned out to be inaccurate. Edgeryders had to provide the logisitics for cash disbursements.
Just now we have had a silly request to reformat a reciept in a manner that contained NO new information for CM.
So, sadly, while I want to go ahead and would like to do the workā¦ I am extremely nervous about being exposed and let down, financially.
What [ArthurD] says is mostly correct. Our proposal sat on the sidelines from November to the first week of February, stalled while MT2019 struggled with the high-level administrative issues, the regional elections and so on. They probably did not know they would turn into a foundation at the end of 2014 yet, but they must have known the rules for procurement ā they simply did not bother processing our proposal in a timely manner.
Maybe we could try to turn this thing into a low risk one by doing four things:
manage expectations with everyone involved.
sharing the risks: as we take someone on, we explain her that the client is well-meaning but administratively weak; that the schedule of payments is in writing and will be managed on a best-effort basis, but there is a margin of SNAFU risk. Does she want to take it on anyway?
dead man switch: no money in by the 30th of June, we refuse to go on.
tight control on cash flow. But, as I said, we need to do this anyway. [ArthurD], we will need to discuss how we monitor that... it could be the beginning of the company's data strategy
On the up side, one of the gigs we put out is for a fundraiser: that job could pay for itself if we are just a bit lucky. In general, the unMon Matera could indeed drive some revenue if we were better at leveraging it: in this sense, the MT2019 contract is generative (example ā Nadia and I have not yet found the time to explain this properly, but we will).
What āexactlyā are we being asked to sign up to? There have been several different versions so far.
I do not have sight of the actual proposal/agreementā¦
I will not agree to subcontracting out work to an non-director. If we donāt get paid, I would be obliged to pay this person as per our contract with them.
Itās tough enough putting in our own āsweat equity/labourā with out having to put in cash as well.
What we are being asked to sign off to is the second part of this. The contract contains this activity plan and a payment schedule.e Some of the work is being allocated to directors, some other is externalised, some other still (the fundraiser position) has not been allocated, and is up for directors to grab if there are any takers.
I see your point, but I need a negotiating position: if they agree to X, we go ahead. Telling them we canāt be in business together under any condition because they are not solid and we donāt trust themā¦ is likely to generate some bad vibes, and is something I would rather not do.
Also, there is a missing piece. Letās try to talk today.
We want to build on the goodwill without getting exposed to losses and or wasted timeā¦
So, we recast that ER budget as a timeline and highlight the upfront expenses as distinct from the wages component. We recast the contract for phased payments and make the first one for 75% of the upfront expenses to be paid 6 wks after commencement of work (and the balances in some other phased structure).
We start the work but if the āupfrontā payment doesnt come ā¦ we have to rethink our positionā¦
Waiting for ACās suggested time-line breakdown of the budget.
This is the cash flow that would materialize with the approved budget and the payment schedule proposed by MT2019.
I propose to start fundraising activities only in July, after the advance. This translates into a small discount for the client, as per this modified budget. In return, we ask to be paid in 3 installments: 50% in June (or ASAP); 20% in September (invoice on August 1st); 30% at the end of the project (invoice on December 20th).
Activities work like this: before the advance we do only social media with no extra cash outflow. After that we do each month one blog post (line 32); one conference participation (line 33); and we pay the fundraiser 800 euro a month. In September we do the event of line 24. In October we stop blog posts; in November we stop conference participations.
If we do all that, with the three-installments schedule, cash flow works like this and is healthy.
This is convincing for me. Shall I go ahead?
For everyone: I think we have learned a valuable lesson on how important this stuff isā¦
(Redacted for stupidityā¦) Ā Ā Ā Ā Also when do we start work ā¦April 1 or April 30ā¦
50% up front seems like a lot to an organisation that says it has cash flow problems ā¦even if it is 3+ months away
I do not think that we should allow the last payment to be outstanding after this organisation is reformattedā¦ so all payments should be in by Decā¦
I thought you were going to go with something like equal thirds ( a third one month in, a third half throughā¦balance at endā¦)
Point 1: they are trying to get a biggish sum of money to do all sort of stuff. This contract is going to be quite small with respect to that liquidity. So itās really a binary thing; either they have liquidity, and then there is going to be enough to go around, or they donāt, and then they have nothing.
Point 2: will try to negotiate it too, thanks for raising.
So I want you all on board, all for one and one for all.