(Total Views: 448)
Posted On: 11/15/2021 8:42:23 PM
Post# of 32973
That was the most exciting part. I'm sure institutions won't find that boring
Most all tech companies need funding to grow. In fact if they don't, then they are likely not growing fast enough and doing something wrong. Even some of the largest tech and non-tech companies in the world take a debt to expand.
Most startups do equity financing because they can't get credit/take on debt. Hard to give credit to a startup as many fail and don't have a lot of assets.
I like the ATM they were doing. Gives them some cash when they want it, without the tipoff to shorts. But they canceled the ATM for what sounds like better financing.
One other thing I read about financing...
“The reason many companies don’t pursue debt financing is because they feel they may not have a clear path to profitability in the time frame in which they would need to pay the debt back,” he added. “Equity extends the runway to find that path, but it also means giving away more of the eventual upside, if and when a company is able to convert valuation numbers into actual value.”
Institutions will love the company is not giving up equity and has a clear path to profitability. I'd be fine if they did, but credit would be better. To get credit, you have to have assets.
It will be interesting to see how the upcoming accretive acquisitions(s) will be funded. Obviously it's not going to be a pure cash deal. Credit or stock equity. I'd tier the latter based on achieving milestones. We will find out shortly.
Most all tech companies need funding to grow. In fact if they don't, then they are likely not growing fast enough and doing something wrong. Even some of the largest tech and non-tech companies in the world take a debt to expand.
Most startups do equity financing because they can't get credit/take on debt. Hard to give credit to a startup as many fail and don't have a lot of assets.
I like the ATM they were doing. Gives them some cash when they want it, without the tipoff to shorts. But they canceled the ATM for what sounds like better financing.
One other thing I read about financing...
“The reason many companies don’t pursue debt financing is because they feel they may not have a clear path to profitability in the time frame in which they would need to pay the debt back,” he added. “Equity extends the runway to find that path, but it also means giving away more of the eventual upside, if and when a company is able to convert valuation numbers into actual value.”
Institutions will love the company is not giving up equity and has a clear path to profitability. I'd be fine if they did, but credit would be better. To get credit, you have to have assets.
It will be interesting to see how the upcoming accretive acquisitions(s) will be funded. Obviously it's not going to be a pure cash deal. Credit or stock equity. I'd tier the latter based on achieving milestones. We will find out shortly.
(14)
(0)
