| Topic Name: |
Business Plans Advice Needed |
| Message Name: |
Reply |
| Date Posted: |
06/06/2001 |
| In Reply To: |
Hi, I think that my past experience may be relevant. To be honest, I am not an expert in the food/beverage/restaurant industries and can't address specific concerns but here goes.
When some of our portfolios companies have been in the same position w/ a question of an accurate valuation, the solution has sometimes been to have an independent, top-tier investment bank value it. This may be especially pertinent, given the 2 metrics that you have suggested. In your situation, there may additional advantages in using that same bank later on for raising further capital such as a private placement or ipo or to advise on an m&a deal. As to structuring the deal, you will have to discuss that with your investors (and take appropriate anti-dilution measures etc. among other things, just like last time.) Be wary; in this environment it is a buyer's market, your valuation will be lower and VCs know you're desperate for capital. Why not go back to your seed investors to see if they will follow on? Any capital may be not bad. Good luck!
IC |
| Message: |
Like the name - you must be a fan of the food network.
I agree that we may have to go back to the angels. What I've suggested to the CEO is that we finalize the current draft of the business plan, circulate it to the board (one board member is a banker so I will be interested to hear what he has to say), and then call a board meeting to discuss the draft and the company's near-term strategy (i.e., go it alone, seek an investment from a big player, sell, etc.). I think once the strategy is better articulated, we can develop a budget and try to intelligently raise the money the company needs to get to the next stage (e.g., a sales level where a major player would be interested in investing in the company, helping us to distribute, etc.). In terms of percentage interests to be allocated to the new investors, I believe we would discuss this with interested investors, including perhaps our initial investors, and enter into final negotiations with the party we believe is most appropriate given our situation. Thanks for your response.
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