There are several finance myths that can mislead a company and in particular a startup. For instance – “I can get a bank line whenever I need it” – WRONG.
Selling The Positives ─ Every new company starts out small. Besides being faced with the unknown, many times it's hard to convince a new customer because of the smallness problem. As an investor, I like to look for what are the strengths of the company as part of the...
The Changing Gross Margin ─ In the physical product world, that I call touch and feel it has been established that the gross margin equals the revenue minus the cost of manufacturing Margins at 40% are good. In the software market, margins above 90% can be found...
Breakeven ─ Every company should have an understanding of its financial numbers that are required for survival. This would be operating at just a sales level for zero profit and the is referred to the Breakeven point.
The Investor Mentality ─ Each category of investor has a different agenda. Here are my perceptions of debtors and investors, which I hope will help approach the task of raising capital more knowledgeably.
Money Really Doesn’t Grow on Trees ─ Growth from zero revenue or accelerating present growth rates requires capital, and the higher the revenue growth desired, the more cash is required to support it.