Continued talk on IHUB of dilution and "can't they
Post# of 3844
Posted On: 09/11/2014 12:51:11 PM
Continued talk on IHUB of dilution and "can't they let this breath a little?" I guess my take is that Martin needs the cash to keep limping along till China is ironed out. He needs to fund the operations in place and the continued advancement of his plan to keep the eventuality of China obtainable. If low PPS and criticism are the price then so be it. No choice.
Having said that however I am still bothered as to why Venture Capital wasn't pursued. Maybe it was. But if revenues from China could ever hit 50 mil and beyond then a well structured biz plan should have been interesting to VCs who specialize in up and coming and/or "green" ventures. And I have to assume their terms would have been less toxic than say Asher and certainly more reputable.
I went to business school and have started companies, albeit very small ones. Funding 101 was always to take a well thought out business plan to those in the business of kick starting new business and lay it out. Start-ups invariably need more money then they think to succeed - corporations or privately held. There are delays, unforeseen circumstances, etc. You need a funding partner that let's you concentrate on planning your work and working your plan instead of constantly looking over your shoulder for needed monies. Maybe Martin is lamenting his do-it-alone choice now.
What worries me is the possibility that Martin's strategy may have been too risky for VC folks to buy into (born out maybe by the 1 year delay due to the China situation, still not resolved, and inability of getting an accounting firm to stay with him). This is a M&A experienced guy. He's familiar with all the ways to best fund a new company. We all know EWSI would now be on easy street if China had gone to his plan - revenue stream from late 2013 and growing in 2014. Martin probably assumed this when he started and felt there was thus no need to bring any outside funding in. Then things changed!
Oh well, sh_t happens. Now he knows China delays caused serious repercussions but he can maybe pull it off if China money starts flowing 4th quarter. He has no choice but to watch the bashers, accept the downlisting and dilute more then expected, causing the current downward spiral. So I think the bottom line is he's still hoping for China. If it comes all will be forgiven. If not the scenarios put forth by LA19 will be the only way this will, and must, go.
Having said that however I am still bothered as to why Venture Capital wasn't pursued. Maybe it was. But if revenues from China could ever hit 50 mil and beyond then a well structured biz plan should have been interesting to VCs who specialize in up and coming and/or "green" ventures. And I have to assume their terms would have been less toxic than say Asher and certainly more reputable.
I went to business school and have started companies, albeit very small ones. Funding 101 was always to take a well thought out business plan to those in the business of kick starting new business and lay it out. Start-ups invariably need more money then they think to succeed - corporations or privately held. There are delays, unforeseen circumstances, etc. You need a funding partner that let's you concentrate on planning your work and working your plan instead of constantly looking over your shoulder for needed monies. Maybe Martin is lamenting his do-it-alone choice now.
What worries me is the possibility that Martin's strategy may have been too risky for VC folks to buy into (born out maybe by the 1 year delay due to the China situation, still not resolved, and inability of getting an accounting firm to stay with him). This is a M&A experienced guy. He's familiar with all the ways to best fund a new company. We all know EWSI would now be on easy street if China had gone to his plan - revenue stream from late 2013 and growing in 2014. Martin probably assumed this when he started and felt there was thus no need to bring any outside funding in. Then things changed!
Oh well, sh_t happens. Now he knows China delays caused serious repercussions but he can maybe pull it off if China money starts flowing 4th quarter. He has no choice but to watch the bashers, accept the downlisting and dilute more then expected, causing the current downward spiral. So I think the bottom line is he's still hoping for China. If it comes all will be forgiven. If not the scenarios put forth by LA19 will be the only way this will, and must, go.
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