FOUNDERS: DON’T READ ON IF YOU ARE TOTALLY SMASHING IT
Founder 1: How are you doing and how is business?
Founder 2: Totally GREAT and we are SMASHING IT
If this is you – don’t read on – you are great!
If however, like 8 out of 10 startups, you are not (yet) ‘venture scale’ and still trying to figure things out, worse still, actually struggling… please DO read on – we are in difficult times and can do with all the help we can get…
We are planD and we help founders and investors when things are not going according to plan A/B/C…
Below are some thoughts that hopefully will be of use/interest:
Caveat – we are not tax (or legal) advisors and none of this should be taken as such – everyone should take advice based on their particular circumstances.
1. The Pivot – some of the biggest success stories we know of today were very different to the original business idea sold to investors. A classic example is Slack which started off as a gaming company – but the pivot in of itself does not sort the funding requirement that most startups have so this may need to be done in conjunction with some kind of round.
2. Deeply Discounted Rights Issues (or cram down rounds) – useful as a way to quickly close a round with existing investors – the bigger the discount, the more likely investors are to follow their money.
3. Transition to a lifestyle business – no bad thing for the founders if this works for them but not great for investors as less likely than before to find a buyer for secondary shares and for the company to exit.
3. M&A – selling a business is never easy but once you consciously position the business to ‘looking at strategic options’ you are at least telling people you are open to discussions.
4. Acquihire – if you have not managed product market fit and no one will (sadly) pay for what you have built, your team may be of value to someone tackling a similar problem – it could be a great soft landing for them and better still if the acquirer will pay for the pleasure.
5. CVA – Corporate Voluntary Arrangement – a legally binding agreement with your company’s creditors which allows a part of your debts to be paid back over time. NB: 75% of the creditors, by value, who voted need to support the proposal. This is great for a viable business which is just burdened by historic debt. Once approved, all unsecured creditors will be bound by the arrangement
6. Shut down and move on – sometimes it’s better to just admit it may be better for everyone if you tried something else – planD can help with connections pointing in the right direction with wind up.
Contact us at https://pland.co/contact-us/ for more information.