Comments on: Financing A Startup – Not always a good idea

By: Anshul

Anshul — Fri, 11 Apr 2008 17:17:20 +0000

I agree with Tom.. you are very loyal to your investors… I am working on a start up too, so I guess I would be in a similar spot sometime in the future…

By: Tom

Tom — Fri, 11 Apr 2008 15:19:12 +0000

I think you may be too generous with your investors. They took a risk by investing in your company. . .some of that risk was that you would not be focused 100% on the business. If the circumstances were reversed would the investors use similar logic? For example if the business was immensely (sic?) profitable would they say “well we only invested a little so you can keep most of the money”.? Most likely not.

Investors lose money in risky startups.

Is your company an LLC? Are you personally liable for any of the investor’s money?

I applaud your loyalty to your investors but wonder if you are being too nice. Maybe it’s not too late to bankrupt the business, take a stable w-2 job for a little then restart in a year? Or perhaps I am just too conservative. .

Tom

By: debt kid

debt kid — Fri, 11 Apr 2008 02:00:18 +0000

@ Jim – No, I used the money in the business, I just didn’t use it wisely, and didn’t focus as much on the business as I should have because I was doing my other stuff.

Success is a good exit strategy for sure.

By: Jim ~ mydebtblog.com

Jim ~ mydebtblog.com — Fri, 11 Apr 2008 01:55:07 +0000

Your investors gave you money for your business and you day traded it? Why declare personal BK when you could have just shut down the business? You’re in the soup now though so might as well look for the way out. My exit strategy for anything I do is success.

By: Tim

Tim — Fri, 11 Apr 2008 00:59:17 +0000

Like you experienced, trading equity can be either a good or a bad thing. It’s good if you trade equity for cash or services from someone who can really help to launch your business. It’s also good in the fact that it puts you on the hook for another person’s expected returns, which may make you work harder.

It’s bad if you just get cash and dont work hard at maximizing the return on it. It’s also bad if you give away equity, didnt really need to do so, and ended up hitting a home run which you now need to forever share the profits.

Tim
TheMoneyKings.com