Every Friday Alacrity provides you an update on the investments and funding activities we have been watching during the previous seven days. We hope you find this resource useful!
With the declared operating losses and considering the amount of capital that was used to shore up the company, it’s almost certain that all $70MM was returned to GFG to compensate for the losses. The entrepreneurs who started the business may have still had equity, but will see nothing for it.
Do not imagine for a minute that this does not also sometimes happen in successful, profitable company exits. If you don’t understand how the terms in your financing agreements, shareholder agreements, etc. work, it very easily could happen to you too. Just because a term is “standard” does not mean it is ideal.
Simply stated, pre-money is the valuation of a company prior to any outside investment force, whereas post-money valuation looks at the equation after the firm has received an injection of outside capital. Is this a case of tomato vs. tomato? Not at all. The two terms have two distinctly different meanings that have have a huge impact on the bottom line of both the entrepreneur’s and investor’s ownership stake.
We recognize that investors are just as guilty of jargonization as the entrepreneur. We believe all our terms are clearly defined and understood, but fail to recognize that this is only because we use these terms daily. So, just as we ask entrepreneurs to define the industry terms they use when presenting, we decided to help the entrepreneur by defining the terms we ask them to understand when we speak. If we all understand common terms, we should be able to avoid confusion.
Straddling the Bosphorus Strait with Europe on one side, Western Asia on the other, and North Africa to the South, Istanbul’s unique location and perspective as the gateway across three continents represent just two of the many reasons why Wesley Clover began helping local entrepreneurs in this international city connect with investors to boost their business.
Our organization’s involvement has been channeled through a strategic partnership between our Wesley Clover team, Netaş, and TRPE Capital, forming the Netas Wesley Clover Tech Fund. The fund is focused on investment opportunities in technology oriented startups in Turkey.