Bridge finance whats you don't think about

I have been busy the last few days, I spent last week in Germany and this week getting ready for Investor meetings....I read this article below in a blog by Rob Shurtleff -http://www.shurtleff.org/ ...a good read...going for bridge finance always feels like the last straw..I have done it before and it was....

Bridge notes can provide investors with a discount in exchange for putting up money along the way to a major financing. Bridge notes can allow an individual or small fund to get into a deal when there might not be room in a round being funded by larger institutional investors. Bridge notes leave price negotiations to independent (often times angel investors personally know the entrepreneur) experienced investors. I have recently been asked to evaluate two investment opportunities that came from friends who are active angel investors. As is common, both of these deals were structured as bridge notes. Both of these deals suffered from the condition we call “A Bridge to Nowhere”.
Like the famous Ted Stevens earmarked bridge in Alaska, a bridge to nowhere can cost a lot of money with the added pain it is your money, not just some tax payers from the lower 48.
Bridge to Nowhere Symptom #1: Not Enough Capital Being Raised
Every investment round should have enough money in it (with buffer for unanticipated shortfalls) to fund a company to the next funding milestone. This is not a precise science. There are many ways these milestones can be cast, but regardless they need to be able to answer positively the question “will the accomplishments be sufficient” to motivate new investors to join the party. In a company without professional investors, this can be a big hurdle. This involves real on the ground accomplishments (beyond spending the cash on hand). Putting 1M into a deal that is going to require 5M - 8M to generate enough traction to attract a deep pocketed professional investor isn’t wise.
Bridge to Nowhere Symptom #2: Terms That Spoil the Deal
We have always been advocates of using the cleanest term sheet possible. Avoid special preferences, ratchets, punitive clauses we are definitely out of the build the company and good things will follow school of investing, others make good money by financial engineering.
Bridge to Nowhere Symptom #3: A Badly Priced Round
This one is a bit of an oxymoron, but bear with me. We recently saw a deal where the company had set a price for a small angel round. The price was, needless to say, very company friendly. This has bridge qualities, these funds will carry the company until it needs a larger professional round or the company becomes self sustaining. This next round has four potential pricing outcomes:
No additional funds are needed. The angels now own a small illiquid piece of a small business.
All is incredibly great and new investors are willing to do an up round.
More money is raised at the current price, which means todays money overpaid.
The only way to raise money is in a down round. Down rounds are bad for the current investors and cast a negative light on the company.
Is it ever prudent to invest in a bridge round. Absolutely.
When the funding source for the next round has been identified and has a high likelihood of completing the deal.
When there are deep pockets already at the table who believe in the deal and are willing to continue funding the company.
As a smaller fund, we frequently take bridge positions so we have a seat at the table. Good deals are a bit like musical chairs and small $ tend to get shoved off the last chair by bigger dollars.

Slainte

Gordon

Something to think about, not for the hard men of business

YOU WANT TO GET ALONG THE ROAD OF SUCESS ? SAY THANK YOU.

No one thanks anyone anymore. It's disgusting. And rude. And arrogant. Just say thank you! Say thank you!
Say thank you to the postman.
Say thank you to your boss.
Say thank you to your employees.
Say thank you to your son or daughter's teacher.
Say thank you to someone who just made photocopies for you.
Say thank you to the person who just bought you lunch.
Say thank you to whomever puts up with your insanity on a daily basis.
Say thank you to your parents.
Say thank you to the guy who just ripped your movie ticket stub.
Say thank you to the woman who just served you.
Say thank you to the person who just spit in your face!

Just say thank you. Make it a habit to say thank you constantly, and you might start to realize that people are constantly regarding you more highly than ever before.
Take a moment to write a thank you note to every one of your clients. To every one who has ever sent you a gift. To every one who has helped you in some way.
Heck, in this day and age, even just sending a quick ten-second text message would be more appreciation than most people receive in an entire year.

If you truly want to become the type of person that others want to meet and work with... start saying thank you! ALL THE TIME! Just get over your own ego and sense of self-worth and start showing some appreciation for the work of others, and?wild notion?you might start to see that these same people start to show some appreciation for what you do, and begin making a more concerted effort to work with you.

Don't wait for others to show appreciation before showing yours. That is a backwards notion. SOMEONE has to set the ball in motion, and as a guerrilla, it should be you. Go ahead, and take the 'thank you' plunge. Once you start doing it, it'll become an addiction and a habit, and you'll start to wonder why you didn't start saying thank you sooner.
Oh, and lest you think you already say thank you often enough: YOU DON'T! Trust us. You don't. No one does. And that is the whole point.
TRADITIONAL NETWORKING: Hoping others will thank you.
GOOD NETWORKING: Thanking them first.

content from "Conrad Levinson and Monroe Mann"

Slainte

Gordon