Restructuring Venture Backed Companies
Restructuring Venture Backed Companies
Venture capital investing is certainly a risky venture. That is what demands the high reward for those who are bold enough to invest in and develop a project without an established track record. While the goal is to maximize the return in an investment, some statistics show that 35 percent of all venture projects experience some sort of loss on the initial capital invested, while 7 percent of projects result in 50 percent of the profits.With such an asymmetric distribution, many investors have recently become less inclined accepting losses as part of their assumed risk in such ventures. Sometimes venture capital firms find themselves in a quandary as to whether it is in their best interest to continue funding a losing investment, wind down a company, or simply force management to give up much more equity in return for providing more funds to pay off old debts.
This is where Business Capital comes in. We present you with the option of restructuring the corporate debt on a 100 percent contingency fee basis. Business Capital has developed a proven, effective way to eliminate debt for venture backed businesses that find themselves in financially distressed situations. In the case of venture capital, no one likes to invest more money in order to pay off past debts, but would rather invest in the growth and expansion of a venture.
As an example, conventional wisdom would put a financially distressed venture backed entrepreneur in the position of requesting more funds from his investors before the investment has realized sustained profitability. This may or may not be in the best interest of the investor or the venture backed company, depending upon timing, return on investment potential, or even the desire to risk funding a riskier investment.
As a professional turnaround company, we can provide an intermediate option. By slashing the corporate debt and burn rate, we can ultimately improve the financial health of the business. We reduce the risk of the investor making an additional round of funding to a project on the cusp of profitability and at the same time increase the value of the venture backed company.
Our venture capital backed clients take no risk in engaging Business Capital to restructure their corporate debt. Our number-one concern in a restructuring is the financial viability of our client. By examining several variables–including but not limited to capital structure, quick ratio, aged payables, and leveraged positions–we are able to put together a strategy that will induce creditors to amicably settle and sign off on the liabilities as paid in full. In doing so, we are compensated on a contingency basis. Unlike attorneys, we do not increase transaction costs by charging for billable hours, court appearances, or stretched out payment plans. In short, we are not compensated until your debt is restructured.
Please consider our services as a tool in order for you to increase return. Our service will allow you to augment the staff of your company and allow management to focus on revenue-generating activities instead of responding to and paying down creditors whose products or services provide little or no contribution to the bottom line. We will slash your burn rate, improve the balance sheet, and stop the bleed.
Business Capital strives to build the trust rapport and respect for a productive business relationship. Our references are freely available upon request and will attest to our ability and experience.