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Cram Down – A Test of Character for VCs and Founders

Steve Blank

They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. Startups that can’t find product/market fit and/or generate sufficient revenue and/or lacked patient capital are scrambling for dollars – and the bottom feeders are happy to help.

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What Do I Do If My Business Runs Out Of Cash?

YoungUpstarts

If the situation is dire, you may also consider recapitalizing the business through a debt refinancing or by selling equity. Conversely, you may be able to save money by bringing in marketing, bookkeeping, or warehousing. Stop founder salaries. How do I Turnaround an Unprofitable Business? Insource or outsource processes.

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Mark Hauser’s Hauser Private Equity Spearheads Major Deals in Industrial Sector

The Startup Magazine

According to Mark Hauser, the rising costs of healthcare and growth of the aging patient demographic in the region made the company well-positioned for growth within the market, and in researching the company he found that it had a very favorable reputation and was in line with Hauser Private Equity’s mission to invest in stable, quality companies.

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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. Every Flexible VC structure allows founders to access immediate risk capital while preserving exit, growth trajectory, and ownership optionality. . Flexible VC 102: Variations.

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Survivors

Both Sides of the Table

I love people who have been put to the test – whether by market forces or even by their own stupid mistakes – and come back stronger. But markets don’t generally love failure. It’s my hypothesis of why so many founding teams have 3-4 founders. They know they can survive.” Yet failure smells.

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Silicon Valley Frontlines: Two Tales of "Working For Equity"

philipsmith.typepad.com

True founders - the gritty, enthusiastic, determined, change-the-world, passionate types - will do this for a long time, including well after they start paying others on staff some real cash. This same 'later stage can't pay you anything up front' ruse gets done for sales and marketing types, too. Marketing on a Shoestring.

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On the Road to Recap:

abovethecrowd.com

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. By January of 2016, that number had ballooned to 229.

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