A friend of mine asks me a few days ago whether to take an investment offer or not. It’s a question very hard to give the right advice considering that her company has gone through up and downs and been looking for investment for sometime now. However when the investment offer came they also managed to receive several customer orders at the same time.
Let's look at the alternatives. She can take the investment and share about 40% of the company to the new investors. By doing that the company's immediate future is secured and she can take that long awaited pay day. On the other hand she can turn down the investment and try to progress the company from the customer order it have and find other ways of financing the gap between customer payments and while delivering the order.
Which ever path she takes she needs to consider multitudes of reasons and different scenarios most importantly the best possible way to grow the company she founded in blood and sweat. Now the question is what is the best way?
2 comments:
Not to accept. Since she is about to get return of her effort. If she had been able to stand untill now, she can survive a little bit more as long as she is able to keep her faith.. And i'm sure there are loving ones of her around who wants to support her during her these tough days..
There is a better alternative:
- go for a smaller investment and negotiate for better terms that will bridge the revenue lag
- negotiate favourable payment terms from customers and make sure the revenue can fund the company growth
- take bank financing or short term loans to cover the required cash using customer contracts and orders as assets
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