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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. Governance.

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Take only “smart money” investments

Berkonomics

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.

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Launchpad LA – More Details Revealed

Both Sides of the Table

He had a pile of debt and covenants that made him vulnerable if the debt holders wanted to play rough. It was inspired somewhat by a comment that Matt Coffin (founder of LowerMyBills) made at a technology event hosted by Jason Nazar. I’m excited.

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

But the biggest thing to know is this: Companies who are scaling quickly in revenue and with a high gross margin often should invest as much capital in growth as they can manage responsibly because when you find a product / market fit and your company is growing at a very fast scale you want to capture market share before competition sets in.

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

YoungUpstarts

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. And it all becomes surprisingly manageable. Federal Bankruptcy – Chapter 7.

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Let’s talk about your banking relationship

Berkonomics

But if a good business finds itself in a bad downturn, there may be a need that did not exist before for temporary cash, even as management reacts and moves to trim fixed overhead. As loan covenants become closer to being violated or after such an event, bankers have some latitude in deciding how to handle their accounts.

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Have you done your annual entrepreneurial health check?

NZ Entrepreneur

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