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> The financing docs don’t costs hundreds of kilobucks, more like an outrageous 20K or so (with the investors’ lawyers’ bill coming out of proceeds — scandalous
by nivertech 4y ago
> The financing docs don’t costs hundreds of kilobucks, more like an outrageous 20K or so (with the investors’ lawyers’ bill coming out of proceeds — scandalous, as that’s what the 2% management fee is for!). An acquisition can cost a lot more.
for some debt financing structures the legal cost can be up to $500K:
Launching a Financial Product: How to Choose the Right Funding Structure
https://a16z.com/2022/10/10/launching-a-financial-product-how-to-choose-the-right-funding-structure/ https://a16z.com/2022/10/10/launching-a-financial-product-ho...
- gumby 4y agoWell, for some specialized bankruptcy debt according to that page. But I have done venture debt (e.g. from someone like WTI or SVB) and never had legal bills as high as they talk about there. Then again they talk about $75MM in debt; the most debt I've taken on was about $25MM and it has always been cheaper than any equity financing. In general I don't like to get creative on this stuff -- I leave that to the actual execution of the business.