That really depends on your financial situation. Depending on how bad you
need he money and how much risk there will be to the investor will determine
the terms. Borrowing less money is rarely a benefit to the investor to get
you better terms, because the investment then becomes less lower scale with
less of a return to justify all the beaurocracy involved in negotiating the
deal.
What you will find is no one wants to buy a burn rate. No one wants to
invest in a business where all the needed employess aren't getting paid by
the existing revenues. They need to know that if they give you money, and
it sits in your bank account, it would still be there six months later if
you didn't expand, so they'd be able to get their money back. The second
the money is used for going after potential, marketing, increasing staff,
deployment of new sites without exisitng custoemrs, etc, there is
significant risk and the deal changes to the investors favor. Its hard
because to make your company look good for taxes means making it look bad
for an investor and vice versa. Investors prefer to see a company which
stands on its own with little ties financially to the owners. More so, they
want to see a clear plan of how, when, and what profit the investor should
expect a paypack. ON the far end of the spectrum, a VC, will look to find
at minimum 500% ROI in 5 years. And you usually need to be cash flow
positive for that. Sometimes taking on an investor really means taking on a
business partner not a lendor, with a loss of control or freedom. However,
if your company is at a sound stage, and you have the track record in place
to justify your proposed ROI, Investors are looking for places to put their
money, when they are probably making less than nothing with it sitting in
the bank or in the stock market.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: "Dan Metcalf" <[EMAIL PROTECTED]>
To: "'WISPA General List'" <wireless@wispa.org>
Sent: Monday, August 22, 2005 11:05 AM
Subject: [WISPA] Taking on an investor?
Any wisp's ever take on an investor? I'm looking to expand and wondering
how I
should handle a potential investor who is willing to provide some serious
capitol?
Thanks
Dan
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