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That's a very helpful walk through, thank you. I'm very naive about this and would appreciate any more thoughts - If you hit a sustained 20% net profitability
by jasim 9y ago
That's a very helpful walk through, thank you.
I'm very naive about this and would appreciate any more thoughts - If you hit a sustained 20% net profitability with just this funding, would you be able to avoid raising more? Would investors demand an exit, and in what time-frames, and is it feasible to pay it out from your profits?
Essentially my question is whether you would be forced to keep raising the stakes for your business, and if so, till what point?
- contingencies 9y agoInvestors understand that projections are fantasies and risk is present: do not worry about them. You are only truly forced to do things as a company if you lose decision making power due to reduced voting rights. To avoid this situation, there are numerous strategies available many of which are outlined in the book Venture Deals.
- jasim 9y agoThanks very much!
- neom 9y agoI would caution that the poster has maybe never raised over $5-10MM. This is a very early stage mentality and does not jive with investors as partners, certainly, there is truth in it, but it's not the crux.
- contingencies 9y agoI agree that this is not an attitude to take to the detriment of partnerships. However, as an antidote to worrying about potential future demands in lieu of focusing on business development, it is an available and effective if perhaps heavy-handed mental modeshift! FYI: Our next round is $10M and we are oversubscribed, but I do not claim to be an expert at raising or anything else for that matter.
- neom 9y agoTotally fair.