Startups Finance Question About Using Accounts Receivable to Buy a Business |
- Finance Question About Using Accounts Receivable to Buy a Business
- Company just completed series A, but what am I holding?
- Where to start? Fluently speaking four languages!
- Where to learn about the legal aspects of enterprise sales?
- Navigating decision making in an operating agreement with multiple members!
- I have written out what I believe to be the process of getting my app idea to market… Please help me correct, improve or add to it!
| Finance Question About Using Accounts Receivable to Buy a Business Posted: 27 Oct 2018 12:00 PM PDT I have now heard two people suggest factoring the target business's A/R to raise cash for the downpayment on the business. Their logic is that this makes sense because "you never have to pay that money back because you just keep factoring month after month." One explained that this is so because it's an "evergreen form of financing." Here's the problem I see: Suppose that the company has $100K in A/R and I factor it to raise $85K for the downpayment to the seller. That $85K has now been sucked out of the working capital is gone forever. So the following month after I assume control of the business I will have a $85K working capital shortage to fill up somehow. What am I missing here? [link] [comments]  |
| Company just completed series A, but what am I holding? Posted: 27 Oct 2018 08:54 AM PDT I am an engineer in a startup software company and we just completed Series A at about $6 million, which is a nice amount and does not dilute us too badly and we are making money independent of the funding. I joined about a year ago and have been given stock options along the way, but I am trying to calculate how much I am holding and have the potential to make if we sell for $X down the road. I get that some info is confidential and some info is made available to employees, but I am trying to figure out what questions to ask so I can understand what I am holding and what I could do to optimize my career / taxation path for the next few years. Here is what I know and what I have been told is confidential, with a approximate values of what I know: My shares: 12,000 common stock at a strike price of $1.00 in Q1 2017. Company Valuation in Q1 2017: $6.5 mil Company Valuation in Q2 2018 (pre-money): $20 mil Series A Raise: $6 mil Reported Dilution: 80% I have a typical 4 year vesting schedule with 1 year waterfall and each month thereafter. I'm at ~30% vested. Total Outstanding shares: confidential My equity share: confidential Current strike price: confidential or too dynamic to be useful(?) [link] [comments]  |
| Where to start? Fluently speaking four languages! Posted: 27 Oct 2018 12:02 PM PDT Hello I want to travel and become an entrepreneur, thinking about technology and commerce, I already speak four languages fluently German, Arabic, Serbian and English. Also I can read and write in three different fonts. (Asperger-syndrom/ my superpower) I am thinking about starting in shenzhen, china because I believe it is becoming too powerful also there are a lot of opportunities for entrepreneurs. Also I could learn Mandarin to connect small and big businesses from all over the world with china. Or South America starting in cali, columbia to learn Spanish. Also the same idea of become an entrepreneur and so on... Eventually traveling to the USA, after Asia or South America, to silicon valley or L.A. to live there and run my business.I believe there are a lot of travel experts in here to help me out. What do you think? Where should I start? [link] [comments]  |
| Where to learn about the legal aspects of enterprise sales? Posted: 27 Oct 2018 07:27 AM PDT I'm a single founder offering AI for biotech research. The product will be evaluated and sold through an enterprise sales process starting with a PoC. I have vague understanding of the enterprise sales cycle from previous jobs, but I would like to learn more about the nuances. I mostly worry about the legal things like when to sign NDAs, what should be in the NDA, how to build a contract (especially for PoCs), and so on. Where can I find more information on these things? I know I'll need a lawyer, but I would like to know at least enough so I can safely start PoCs to build traction before I approach investors. Thanks! [link] [comments]  |
| Navigating decision making in an operating agreement with multiple members! Posted: 27 Oct 2018 10:08 AM PDT Hey, I'm in the process of launching my start up. I brought on two small investors, who in return will have a 10% stake in the business each. Leaving myself with 80. I will be the only one working on the company out of the three. Everything has been incredible smooth so far, and we have just finished drafting an operating agreement. The problem is, they are having difficulties with any decision making power, that doesn't require a unanimous decision. For example, we have it currently written that certain aspects require unanimous decisions, however basic disagreements outside of this, will be left up to a majority vote from ownership (ie, myself), which is how I would like it to be as a majority owner. They have asked that in these cases, we have a majority vote, with each member getting one vote, which would leave me 2 to 1 for decisions make from them against me. Does anyone have any advice on how to navigate this with them, without causing offense or coming across in an unprofessional manner for wanting to maintain my decision making majority ownership precision when it comes to day to day running of the business. I will be the only one working on the business in terms of staffing from the three members. Any advice would be welcomed as this is my first business I'm establishing. [link] [comments]  |
| Posted: 27 Oct 2018 08:02 AM PDT I might have gotten some stuff in this post completely wrong/in the wrong order etc, so if I have, please tell me. I have scraped most this off different sources online and am just trying to figure this all out so I welcome any help and advice! Its a game app I want to create. Step by step process to publishing: 1) Create visual draft: Draft of every page. Good icon. Good title. Short unique, interesting, optimized description under 25 characters using main keywords. 2) Study and learn from competitors/similar apps: Know what their ratings are saying, what keywords they are using, and read their user feedback. Study their terms/privacy policy. 3) Decide versions/platforms: Paid and free/ad supported versions. App Store and Google Play. So 4 versions in my case. 4) Ad types/placements: Interstitial/full screen ads – Placed at natural pause points, like when completed a level or moving between menus. Because these aren't actually interrupting the experience of using the app. Banner ads at the bottom of pages also. 5) Find a developer/team: Make sure they list the relevant skills you need (iOS development/Swift. Android/Java). Only consider those who have done past work very similar to what you want. Test their past work (download the apps and use them). Ask if they are willing to sign an NDA (non-disclosure agreement). Ask if they would consider a 3 month bug fixing/support window once completed/published. Ask if willing to work on it in future (paid of course) for updates etc (to keep it up to date with new versions of iOS and Android for example). Make sure you will own/be able to claim copyright on the code. When a time frame is calculated and agreed upon, offer a bonus to be paid if it's completed within the time frame. Possibly implement a daily deduction for each day after the agreed time frame. Make sure they are clear on your drafts, version and ad type/placement requirements. 6) Development: Make sure you are available for communication at all times whilst the build is in progress. Whilst the development team are taking care of the app, set up the social media pages and build a website so you have an online presence other than on app platforms. The website should be simple. Press contact, terms, privacy etc. Links to download the app from the App Store and Google Play. Also set up your hosting... Whilst I need to investigate some more, I have been recommended Amazon Web Hosting. I have seen on their site: "only charge you for the resources you use/offer pay-as-you-go pricing" So I am hoping this would be sufficient whether the app flops or completely blows up). Set up on chosen ad/ analytics platform and get it ready to integrate your app. I am thinking of going with Flurry. 7) On handover from the developer: Do vigorous testing (different devices/operating systems). Try to get another developer(s) to check it over (quality, back doors etc). Integrate with your ad platform. 8) Upload/publish: Upload it to the App Store and Google Play. 9) Marketing: Share it with everyone you know. Try to get bloggers excited and talking about it. Try to create a social media buzz. 10) Maintenance: Keep an eye on ratings/feedback/what people are saying about it. Consider changes commonly mentioned. I am up to step 5 (finding a developer) so things are getting important now. A few concerns I still have:
Thanks for reading and any help! Hopefully other wills find it useful too [link] [comments]  |
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