Remove Cost Remove Covenant Remove Management
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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

As two fund managers employing Flexible VC, we think it is a healthy addition to the ecosystem and will yield more predictable and stable healthy returns for investors. Too often, investment structures force the management team to make decisions between misaligned growth and investment (return) objectives. Early liquidity.

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. Think DropBox, Airbnb, Uber, Maker Studios.

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Launchpad LA – More Details Revealed

Both Sides of the Table

There is no cost but you must physically be based in or move to Los Angeles for the 6 months of the program. He had a pile of debt and covenants that made him vulnerable if the debt holders wanted to play rough. Today we announced Launchpad LA V2. Full press release with more details is here. I’m excited.

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Assessing The State Of And Options For Your Business During COVID-19 Fallout

YoungUpstarts

Following from that, is there an operational plan that can be implemented to lower costs while salvaging the competitive advantage of the company? A “reorganization” that enables management to stay in control of the business, but wipes out equity if creditors are not paid in full. And it all becomes surprisingly manageable.

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Who are the Major Revenue-Based Investing VCs?

David Teten

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. Repaid 12-36 months with ability to prepay at reduced cost. In a situation where Pied Piper’s revenue growth exceeds expectations, prepayment discounts are built into the structure, lowering the cost of capital.”.

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What if you see juicy competitor information?

Berkonomics

And none of this is especially considered a trade secret, violating the unspoken covenant between competitor CEOs that there is a limit to such exchanges. What does a CEO do with this wonderful, rich information dropped at his door at no cost or obligation? How should you respond?

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An economics lesson for growing companies

Berkonomics

Read the loan covenants carefully. Other lender tricks adding to the true cost. It is important to calculate the true cost of such money. Then there is the loan audit fee, often more than $4,000 a year, to pay for the lender’s auditor to make sure the collateral and company are compliant with the covenants of the loan.