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| | | KinderFodder
 
Group: Forum Members
Last Login: 3/16/2006 8:41:29 AM
Posts: 13, Visits: 24 |
| | Have you looked into small business loans or borrowing against your receivables? These are a good way to get expansion loans if you have something established. Thanks.
Manish M. Shah
President
AcceleWeb, Inc. |
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Fodder Chief
Group: Administrators
Last Login: 3/4/2008 5:30:47 PM
Posts: 179, Visits: 845 |
| | Well, I suppose you wouldn't actually want your customers to take an equity stake in your business, so a PPM wouldn't really make sense in this case, would it? My thought was more along the lines of this: - Large customer has 50 installations
- Large customer wants new feature
- You agree to develop feature
- You and customer agree price for feature upgrade is $1000 per installation
- Customer gives you half up front, agrees to give you half upon completion
- Customer gets considerable input into the feature specifications
- You use the money to develop the feature
- Customer agrees you retain all rights to feature
That said, I think that negotiating this with the right customer (or customers) could be tricky. They will be hesitant to pay for software that doesn't exist, but if you have a great relationship with them and they trust you, maybe you could work this out. Ben |
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The GodFodder
Group: Administrators
Last Login: 1/28/2008 9:24:38 PM
Posts: 119, Visits: 275 |
| Erik Weingold (2/17/2006)
I also think going to your largest customers in pursuit of expansion capital is a good idea. In addition, if you would like to use a private placement memorandum as the vehicle to seek capital from such potential investors, feel free to contact me. Erik Weingold PPM Lawyers, LLC http://www.ppmlawyers.com ph.646.522.0473 erik@ppmlawyers.com A PPM might not be the best vehicle for a company at this stage of development. Sorry to rain on your parade, Erik! In fact, about 2 years ago I wrote an article on this very subject. Take a look: http://www.vcfodder.com/?PAGE=117 I think PPMs might be OK for larger companies ($10+ million in sales and $2+ million EBITDA), but they are not appropriate for smaller companies, or pure play start ups. What the PPM does is draft the deal terms before the entrepreneur finds investors. This is backwards! The entrepreneur should find the investor first, then hire a lawyer to draft the stock purchase agreement (or, more probably, the convertible note documents).
Cheers! Bill
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"It doesn't take talent to write, it just takes pen and paper...or a computer." |
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Fodder Chief
Group: Administrators
Last Login: 3/4/2008 5:30:47 PM
Posts: 179, Visits: 845 |
| | I'm not sure if the owner will need to give up equity to procure the relatively small amount of money he needs. |
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| | | BabyFodder
Group: Forum Members
Last Login: 9/13/2006 3:28:54 PM
Posts: 2, Visits: 15 |
| | R. K. Ellis and Company is a management consulting company that specializes in raising expantion capital in Central America for small and medium size companies. We charge no up front fees, but we do require that the client pay the listing and travel expense. These expenses vary from country to country, but range from USD$20.000 to USD$75,000. The amount of capital that can be raised ranges between USD$500,000 and USD$50,000,000. All Central American countries treat domestic and foreign companies the same, there is no descrimination. Contact us by email to arrange a conference to discuss how we can help you raise expansion capital. Our email address is rke@satx.rr.com |
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| | | BabyFodder
Group: Forum Members
Last Login: 9/13/2006 3:28:54 PM
Posts: 2, Visits: 15 |
| | Your company sounds like one that we can help raise capital. Please contact us by email to arrange a conference call, our email address is rke@satx.rr.com. |
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