Both Sides of the Table

SEPTEMBER 28, 2014

Many venture debt lines have “covenants” that restrict you from going below a certain amount of cash in the bank (in normal times they are more common – in better times they are less common). And you risk “trading while insolvent” which has legal implications.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

YoungUpstarts

JUNE 17, 2020

While businesses are generally seeing payment waivers across the board, the vast majority of contracts and virtually all loans include other obligations (or “covenants”) that if not satisfied or specifically waived still render the agreement in default. What constitutes an “Event of Default” under those agreements?

Bankruptcy 179

Bankruptcy Covenant Florida Balance Sheet 179

Both Sides of the Table

APRIL 19, 2011

He tells the story of how he was out of cash, stressed out, nobody in LA or Silicon Valley would give him money, he had finally found an investor in Minneapolis but his venture bank was going to shut him down for breaking a “covenant&# in their agreement by not having enough cash in the bank. The answer?

Acquisition 304

Acquisition Warrant Customer Term Sheet 304

Berkonomics

FEBRUARY 22, 2024

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.

Covenant 62

Covenant Revenue Email Employee 62

NZ Entrepreneur

FEBRUARY 17, 2019

Breaching facility limits and covenants – this can take the form of a company breaching its overdraft facilities with multiple excesses each month. Additional funding requests – requesting funding over and above those forecast by the company can be a tell tale sign that all is not well.

New Zealand 42

New Zealand Covenant Forecast Government 42

Up and Running

NOVEMBER 25, 2020

Post-termination covenants. In addition to the possibility of facing liability for “lost future royalties” as discussed above, as a prospective franchisee, it is important to be aware of any other post-termination covenants in your franchise agreement as well.

Covenant 89

Covenant Due Diligence United States Operations 89

David Teten

AUGUST 19, 2019

Like other RBI firms, Decathlon does not require warrants, governance involvement, or the types of financial covenants that are often associated with other venture debt type solutions. Unlike many RBI investors, a full 50% of our investment activity is in non-tech businesses.

Revenue 60

Revenue Technical Review Software Review Equity 60

Berkonomics

JULY 16, 2020

Read the loan covenants carefully. 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. A five-day float increases the actual interest rate by up to an additional 2% over the stated rate.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

Feld Thoughts

MARCH 29, 2019

My favorite moment of the trip was when someone asked me if I was running the Covenant or the Barkley. There’s a burgeoning foodie scene here and even though my taste buds stopped working on Tuesday, Amy and Ian said the food was delicious. In the category of “try again next year”, I may be back in Knoxville in 2020.

Covenant 86

Covenant Marketing 86

Pascal's View

JULY 9, 2017

The easiest way to do so is via SAFE notes, due to their simplicity, “available online” documentation, no major covenants established to protect the investors, no governance implications at the board level, etc. All of these items are postponed until the elusive priced equity round. It’s going to be great!”.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Berkonomics

DECEMBER 21, 2017

The combination of restrictive covenants in the investor documents and the new dynamic of board members with an agenda make for a change in the culture of the corporation, certainly one for the CEO.

Covenant 97

Covenant Cost Angel Groups Angel Investor 97

Up and Running

APRIL 2, 2015

Most commercial loan include what we call loan covenants, in which the company agrees to keep some key ratios —quick ratio, current ratio, debt to equity, for example—within certain defined limits. I think this is to prevent multiple sets of books—which I think would be fraud, by the way—but banks want to see the corporate tax returns.

Balance Sheet 60

Balance Sheet SBA Covenant Technical Review 60

Berkonomics

FEBRUARY 8, 2018

We have previously made the case that professional investors demand more in the form of restrictive covenants and lower valuations. This statement could be considered controversial. Now we explore the other side of that coin.

Covenant 97

Covenant Angel Investor Valuation Later Stage 97

Up and Running

MAY 21, 2015

Covenants, a legal term that just means promises, are things you promise to do (known as affirmative covenants ) or promise not to do (known as negative covenants ) as the manager of the business. Any investor is going to want covenants in some form, and it’s not unreasonable that they do.

Covenant 60

Covenant Liquidation Preference Ratchet Dilution 60

Pascal's View

DECEMBER 17, 2012

It is critical to know the state of the art in merger terms leading to an acquisition and in post-merger covenants, particularly with respect to the release of cash consideration held in escrow or as a holdback by the buyer.

Acquisition 38

Acquisition Merger Covenant Liquidity Event 38

Berkonomics

SEPTEMBER 13, 2010

Bank loans with restrictive covenants are taken on. The operations of the corporation become more complex. Ownership is spread among several classes of investors. The number of employees grows. These events, one or all, usually are triggers for the founders to seek to create a board for oversight and guidance.

Covenant 59

Covenant Software Review Stock Options Vesting 59

Austin Startup

DECEMBER 7, 2017

To solve this, VCs and entrepreneurs need a quick and easy way to provide seed funding, without a long, drawn out negotiation, onerous debt covenants, or a crazy valuation that could hurt the investor and/or the entrepreneur. Two sides of the same intractable coin. YC came up with a novel way to do this in 2013 called the SAFE note.

Covenant 48

Covenant Cap Table Early Stage SBA 48

YoungUpstarts

SEPTEMBER 20, 2013

You would need sound legal advice from an attorney to ensure that you avoid nasty covenants in the lease. So is true when leasing the physical space for your business. Upon leasing, there are legal papers, waivers, and contracts to consider. Intellectual property.

Small Business 207

Small Business Intellectual Property Covenant IP 207

YoungUpstarts

JUNE 28, 2017

Restrictive covenants to prevent the seller opening up in immediate competition. Advising on encumbrances or debts a vendor’s business may have outstanding. Reviewing and drawing up contracts including property leases or purchases. Conveyancing.

Covenant 113

Covenant Due Diligence Social Media Australia 113

Feld Thoughts

JANUARY 1, 2019

I’ve signed up for the 2019 Cowtown Marathon (Fort Worth) in February and the Covenant Health Knoxville Marathon (Knoxville) at the end of March. This has been a steady build since I started running again in mid-September with a week of two runs, 1:21 for 4.94 miles and a TSS of 52. I’ve lost seven pounds since v53.0

Fort Worth 86

Fort Worth Covenant Email Community 86

Berkonomics

JANUARY 24, 2013

As loan covenants become closer to being violated or after such an event, bankers have some latitude in deciding how to handle their accounts. For those with existing bank loans, that constant attention is more than just important.

Covenant 66

Covenant Revenue Operations Small Business 66

Early Growth Financial Services

JUNE 19, 2014

1) Hiring — There are 3 main areas of risk here: restrictive covenants, compensation arrangements, and confidential information. Restrictive covenants — Employers often use non compete and non solicitation clauses to retain employees.

Covenant 58

Covenant Non-Compete Startup Hiring 58

Up and Running

SEPTEMBER 26, 2016

Covenants: borrowers face fewer operational restrictions or covenants with venture debt. Accounts receivable loans will typically include some minimum profitability or cash flow covenants. For the most part, startups shouldn’t have an interest rate higher than four or five percent.

Covenant 60

Covenant Institutional Investors Balance Sheet Warrant 60

YoungUpstarts

AUGUST 19, 2019

Therefore, you need to, first of all, familiarize yourself with such terms as default, loan-to-value ratio, financial covenants, balloon payment, and personal guarantee among many others. Arrange Future Business Loan Repayment.

Entrepreneur 147

Entrepreneur Covenant Business Plan Finance 147

Berkonomics

JANUARY 4, 2018

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.

Covenant 97

Covenant Revenue Email Employee 97

David Teten

AUGUST 1, 2019

Structuring and Negotiating Executive Compensation Packages: Addressing Pay, Severance, Restrictive Covenants, and More. Negotiating Employment with a Private Equity Firm – 7 Surprises to Expect. Executive Compensation & Severance. Interim CEO And Turnaround CEO Employment Agreements: Terms And Compensation.

Private Equity 60

Private Equity Equity Due Diligence Portfolio 60

David Teten

SEPTEMBER 10, 2019

Structuring and Negotiating Executive Compensation Packages: Addressing Pay, Severance, Restrictive Covenants, and More. Negotiating Employment with a Private Equity Firm – 7 Surprises to Expect. Executive Compensation & Severance. Interim CEO And Turnaround CEO Employment Agreements: Terms And Compensation.

Due Diligence 60

Due Diligence Stock Options Covenant Private Equity 60

The Equity Kicker

JULY 15, 2014

Daniel likes to give the following example: SMEs use lawyers a lot to review employment contracts, but the cost of doing so can vary from £300 to £1,400 depending on the complexity of the situation (options, founder status, restrictive covenants etc.). And then we will connect them with a range of suitable lawyers.

Covenant 106

Covenant Customer Early Stage Matching 106

YoungUpstarts

FEBRUARY 19, 2016

Given the challenges and limitations of non-compete agreements, there are other, less severe restrictive covenants and agreements that may be used as alternatives or supplements to non-compete agreements. These include confidentiality agreements, non-solicitation agreements, and non-circumvent agreements.

Non-Compete 100

Non-Compete Florida Jacksonville Covenant 100

YoungUpstarts

FEBRUARY 10, 2016

Housing laws are also covered by different legal covenants, and vary by property type. For example, if you’re a foreigner looking to make a profit by purchasing a property like a condo and renting it out, there are restrictions on how many units in a building can be held by non-Thai owners.

Thailand 100

Thailand Covenant Cost Search 100

Tim Keane

MARCH 9, 2011

  Appropriate covenants.   Appropriate covenants. Possibilities: 1.    If plenty of cash flow regardless of plan for sale/retention of business: Senior bank debt based on cash flow coverage and new assets.  Maybe Small Business Administration guaranteed loan. Possibilities: 1. 

Finance 83

Finance Bootstrapping Startup Equity 83

Lightspeed Venture Partners

DECEMBER 10, 2012

Banks often have operating covenants for their loans that require the company to be hitting plan, or close to it. These firms typically charge more than banks and have higher warrant coverage, but have fewer restrictions on the use of capital, no covenants, and will often lend more than a bank will.

Covenant 162

Covenant Warrant Southern California Los Angeles 162

YoungUpstarts

MARCH 14, 2012

EBITDA is often used in loans covenants. EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is a metric of measurement of cash earnings that is generally non-GAAP. ” What You Thought It Meant: Everyone Brings Ice, Tequila, Dom, and Alizé: the perfect BYO Party for the rapper on a budget.

Non-disclosure Agreement 202

Non-disclosure Agreement NDA IPO Covenant 202

Berkonomics

AUGUST 21, 2013

Loan covenants are always required that clearly state how much net equity, the minimum current ratio, and other minimum financial requirements must be maintained to be compliant, and state the penalties for non-compliance – which are always severe, often threatening to call or cancel the loan in its entirety.

Covenant 61

Covenant Warrant Dilution Intellectual Property 61

Feld Thoughts

JANUARY 25, 2011

Following is my current schedule: April 3 – Knoxville, TN – Covenant Health Marathon. After an MRI and some vicodin , I ruled out the really bad stuff and then relaxed enough to get a massive self-adjustment in September which seemed to fix the problem. I’ve been pain free since then. So I’m optimistic about 2011.

St. Louis 105

St. Louis Covenant Alaska Dallas 105

Up and Running

AUGUST 6, 2014

Since asset-based loans don’t rely on the borrower’s operating performance, but on the quality of the collateral, fewer financial covenants are required of the borrower, and as compared with traditional bank lending, ABL lenders typically require a much more limited degree of reporting back to the lender.

Covenant 85

Covenant Finance Operations Small Business 85

YoungUpstarts

JUNE 19, 2018

Pensacola used a Covenant for the Community to guarantee that contractors would use local minorities in the revitalization of downtown. Smart leaders make sure people of all races, genders, sexual orientations, ages, and economic levels are part of the decision-making process and that minorities get a piece of the economic action.

America 100

America Community Covenant Metrics 100