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The fast options to get business cash are: Collecting from customers. Each of these options has negative ramifications – bad customer experience, personal financial strain, and high-interest rates, respectively speaking. Customers not paying invoices. If you answered “no” to #2, you need to scramble to get cash in time for #3.
Their investment supported Stat Health’s recapitalization, alongside Spanos Barber Jesse & Co. They have executed a number of co-investments with Shore Capital Partners, including a partnership with Innovative Packaging Company, a custom packaging solutions provider operating out of Vancouver, Washington.
I worked with a founder who advocated for a product pivot and then shut it down right after launch because customers didn’t immediately sign up. You find out those that have the fortitude to work out a new way forward, who can handle recapitalizations or downsizing or shutting down business lines or hiring whole new teams.
But then there’s one more thing – to make it easier for you and a few key employees to swallow the cram down – they promise that you’ll get made whole again (by issuing you new stock) in the newly recapitalized company. All of a sudden the deal which seemed unpalatable is now sounding reasonable.
The news is coming out that it has a new owner, that many of the employees have already been offered jobs post ABC, and that the service will continue to operate and customers won’t be negatively impacted. OnLive looks to me like the second case. The founders equity, the investors equity, and the employees equity.
The feedback is “come back when you’ve made more progress with customers.” So they recapitalize the company. The first release is underwhelming, but they iterate aggressively, with feedback and support from some of their angel investors. The product gets a lot better. ” They are running out of money.
The only way to remove their equity holding in the cap table is by buying them out or through a recapitalization of the company. Sometimes, the vesting is milestone-based (upon the close of a financing) or performance-based (signing up customers, doing deals, recruiting). Advisors tend to have 100% acceleration on change of control.
For example, they introduce the company to a key customer or investor. They know all your prospective customers intimately. They’ll bring you leads for customers, employees, and investors. The company is acquired, recapitalized, or otherwise restructured and the advisors are no longer useful or desired.
I really believe that some firms have the strategy of edging out the entrepreneurs, bringing in a new management team, recapitalizing the company, minimizing the founders’ share and taking maximum ownership for the VCs. . • O utsized returns through sharp elbows – OK, here is what it boils down to. Brand isn’t everything.
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