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You've captured a lot in this comment. Yes and I stand by every word of it You've characterized Arthur Shorin as a 'huckster' which in many places would be co
by dmk23 14y ago
You've captured a lot in this comment.
Yes and I stand by every word of it
You've characterized Arthur Shorin as a 'huckster' which in many places would be considered insulting. This guy spent 27 years at his Grandfather's company and grew its revenues by 5x [1]. That is some pretty serious credibility in the candy business. Not 'huckster'.
In my book anyone who asks for 75% of your business is a huckster. I do not care about his credibility in the family business, the only thing I see here is some guy wants to pick up this lady's assets for nothing. If you read "Burn Rate" you'll see this type of vulture investor documented pretty well. They prey on desperate people who do not know any better. When making this kind of offer they are clearly not treating you with respect.
http://en.wikipedia.org/wiki/Burn_Rate http://en.wikipedia.org/wiki/Burn_Rate
Contrast that with going broke. Having your net worth gro 25% is much better than having it shrink 100%.
Contrast that with cutting down your burn and finding other resources to fund your production run. That's what the word "resourceful" means. There is always an alternative to giving up or buying into empty promises.
Then the last lament, which I have heard many many times, is this "The real solution though is to plan things through and not get yourself in the situation of "needing" to raise cash or go bust. There are tons of ways to avoid getting stuck is this situation"
That's how successful businesses are run, including Arthur Shorin's. He did not become successful by turning over control to the first guy who asked. But of course if you have unrealistic business plan that requires a lighting to strike and you have no Plan B, the most likely scenario is a shutdown or this type of vulture deal.