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Arif Bhalwani, CEO of Third Eye Capital, on the ‘Golden Age’ of the Private Credit Market

The Startup Magazine

As an investor, these experiences have honed my ability to see beyond spreadsheets and valuations, to the core of what makes businesses thrive: the people, the vision, and the relentless pursuit of excellence. However, it’s crucial to approach this ‘golden age’ with a balanced perspective.

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Take only “smart money” investments

Berkonomics

We have previously made the case that professional investors demand more in the form of restrictive covenants and lower valuations. Often, that money is worth more than the cash invested, because the investors who often become members of the board bring a wealth of experience, insight, relationships and deeper pockets to the table.

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What are the costs of taking investor money?

Berkonomics

The combination of restrictive covenants in the investor documents and the new dynamic of board members with an agenda make for a change in the culture of the corporation, certainly one for the CEO.

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Launchpad LA – More Details Revealed

Both Sides of the Table

He spoke about his experiences in the dot com crash of the early part of the century where no VC’s would give him money. He had a pile of debt and covenants that made him vulnerable if the debt holders wanted to play rough.

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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

Zack Mueller, Attorney, Ireland Stapleton Pryor & Pascoe, PC , points that almost “no one, from LPs to entrepreneurs to attorneys, has much experience with these instruments. Typically promissory note or non-voting common stock, with covenants. Hard covenants with potentially strict penalties. . Collections risk.

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Master of Customer Acquisition, Matt Coffin, On Startups …

Both Sides of the Table

He tells the story of how he was out of cash, stressed out, nobody in LA or Silicon Valley would give him money, he had finally found an investor in Minneapolis but his venture bank was going to shut him down for breaking a “covenant&# in their agreement by not having enough cash in the bank. The answer?

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Let’s talk about your banking relationship

Berkonomics

For small businesses, there is such truth in that statement that you can trust the story to be based as fact from experience. As loan covenants become closer to being violated or after such an event, bankers have some latitude in deciding how to handle their accounts. Exceptions and good reasons to work on them.