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Your need for a board grows with complexity.

Berkonomics

Then along comes either money or contracts from strategic or financial investors or partners. 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.

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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. Similar to the explosion of seed funds in the past decade, we (and some limited partners too ) believe these Flexible VCs are on the forefront of what will become a major segment of the venture ecosystem. Of the Inc. 5000 companies, only 6.5% return cap.

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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. In a number of cases, these VC partners have made the difference between success and failure or at least growth vs. stagnation. This statement could be considered controversial.

Covenant 118
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Who are the Major Revenue-Based Investing VCs?

David Teten

In 2019 we partnered with several revenue-based lending providers, effectively creating a marketplace. “. We collect more data on an individual business than, to our knowledge, any other RBI investor, through our application process, data partners, and various public sources online. Bigfoot Capital.

Revenue 60
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Master of Customer Acquisition, Matt Coffin, On Startups …

Both Sides of the Table

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? And he said ok got it.

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An economics lesson for growing companies

Berkonomics

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.

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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. In a number of cases, these VC partners have made the difference between success and failure or at least growth vs. stagnation. This statement could be considered controversial.