In case you haven’t noticed, it’s not the grandest time to start a business. But because the Guy and I are always dreaming up new business plans, this article on venture capital caught my eye. Reading things like this makes me realize how long my to-do list is to even be able to articulate what a business plan would look like. The basics of the capital structure are crucial, I’m learning. A few guiding principles I took away:
1) Ensure that you maintain control from investors with a controlling stake.
2) Even Institutional investors may demand a different CEO, even without a majority stake – so be careful about terms.
3) Start-up capital is precious. Do not deplete working-capital reserves until the venture is kicking off positive cash-flow.
In essence, watch your (company’s) back and your bottom line! I guess I’ll just tuck this one away for now….
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