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Well the debt really acts like a line of credit, in that we are using it for hardware which is then immediately put into service and generating revenue, so the
by raiyu 7y ago
Well the debt really acts like a line of credit, in that we are using it for hardware which is then immediately put into service and generating revenue, so the available debt and the drawn down debt are different terms and really there is no need to draw additional down additional debt if the company stopped growing tomorrow.
That aside on the equity side we only raised $123MM. Assuming that the acquiring entity sees the debt as a line of credit that is backed by a revenue generating asset (servers with customers on them) then the company would need to be acquired for $123MM for common shareholders to end up with nothing.
Given that we are already over $250MM in revenue that seems very unlikely.
PS> I hope this comment ages well =]
- toomuchtodo 7y agoI hope this comment ages well also! People deserve compensation for the value they've created. I appreciate that you took the time to reply; you might have Crunchbase update their info, as my comments are based off them showing >$300MM in equity funding. Your numbers make the scenario look much better.
- raiyu 7y agoYeah - they just lump everything together. They even include employees selling secondary as "raised" capital and the same for debt which is inaccurate. I'd be happy to tell them that, but I'm a little annoyed with them because they used to list everything publicly and then put a bunch of stuff behind a paywall. Doubt, that it would matter much to them regardless plus we are one of the few startups that raises both equity and debt, so I don't think it something that happens often enough for them to really change how things operate on their end.
- termau 7y agoQuestion do you lease or buy your servers? It isn't quite clear which you do. Can see in evaluations that a lot of the kit is getting a little bit long in the tooth which I read as your not buying as you're growing but a lease model is the only way I personally see you running up enough costs to warrant the line of credit