3 ms·
There are a couple of good reasons, actually. For one, it improves the morale of the team. Twenty-eight million dollars give a false impression of security to t
by orangethirty 14y ago
There are a couple of good reasons, actually. For one, it improves the morale of the team. Twenty-eight million dollars give a false impression of security to team members. In terms of the market's perception, the perception of company's solidity improves. Don't mind that outside investment is actually a loan (which for me is a risk, and not an asset). The word investment brings in a lot of positive connotations with it. There is also the morale-crunching effect it has on the competition. Everyone else starts to scramble in order to raise money, instead of actually improving their offerings. Its a weird psychological effect mostly found on founders. Investment announcements from competitors make them suffer a lot, and a fair amount simply lose concentration and or quit.
- cookingrobot 14y agoHow is stock sale a loan?
- jacquesm 14y agoA series 'B' round is not a loan, and it is definitely not a risk but a huge asset.
- robryan 14y agoIt can be a risk, it redefines the kind of exits you can have in future and still be successful. The founders would likely see little now from a $50 mil sale where as that would be a big windfall for a bootstrapped or angel invested only company.
- jacquesm 14y agoYou trade one risk for another, and you are ignoring that post money optimizely has $28M in the bank so it's balance sheet is simply $28M fatter than it was pre-money. A buyer would simply be buying cash and would have no problem with paying $78M. If optimizely now spends this $78M in a way that does not contribute to the balance sheet (superbowl ads, whatever) then they have limited their future options.