Eisaiah EngelGuestSeptember 2, 2019 at 3:44 pm
Hi there! I’m the co-author of the Founder Friendly Standard. Facebook, Google, and Snapchat have supervoting equity. There are plenty of other companies that grew very large without raising money at all like Mailchimp, Calendly, LeaseQuery. John Mullins from London School of Business wrote a book called The Customer-Funded Business which give lots of examples of companies that didn’t need investment to gain lots of traction.
The more you cash you generate from operations while reducing or delaying expenses, the better position you’ll be to command Founder Friendly Standard terms – even if your net profit is temporarily negative. This may mean rejiggering your business model to receive payments upfront from customers. Mullins’s book has great ideas here.
If your company is pulling in cash at a rate significantly more than the cash you’re spending–then you can use that cash to grow even if you’re net revenue is negative. Then, you can go through expense reduction to get profitable and then get a bank loan or other forms of capital that doesn’t want to control your life like Venture Capital.
<span style=”font-family: inherit; font-size: inherit;”>Disclaimer: This post is for informational purposes only. This is not legal, financial, or professional advice of any kind. These words are my own.</span>