How Venture Leasing Added Millions To A Startup’s Equity Value

Written by George A. Parker


Craig Berman beamed noticeably after completing his board presentation. Berman, CEO of a startup that develops nanotechnology applications forrepparttar defense industry, had just closed a $ 20 million equity round. Berman finalizedrepparttar 112080 round at an equity valuation that maderepparttar 112081 whole board blush. Only six months earlier, Berman’s team faced a daunting technical delay that setrepparttar 112082 company back three months. With only four months of cash remaining from a previous equity round,repparttar 112083 delay would cause Berman’s company to burn cash faster and to fall short of an important benchmark.

The prospect of raising additional equity earlier than expected and at a much lower valuation than anticipated was a chilling thought for Berman and his board. Just as things appeared to be headed downhill,repparttar 112084 company’s CFO broachedrepparttar 112085 idea of obtaining $ 1.5 million in venture leasing. Roughly $ 600,000 of this financing would be used to finance existing equipment. The balance could be used for upcoming acquisitions of computer workstations, servers, software, and test equipment.

A colleague had introduced Jamal Waitley,repparttar 112086 company’s CFO, to Jerry Sprole. Sprole heads Connecticut-based, Leasing Technologies International, a leasing firm specializing in equipment financing for venture capital-backed startups and emerging growth companies. It took Waitley less than a month to getrepparttar 112087 financing in place. Cash from selling and leasing back existing equipment along with a leasing line to add new equipment allowed Berman’s firm to operate three extra months without additional equity. Whenrepparttar 112088 firm finally completed its $ 20 million equity round,repparttar 112089 pre-money valuation was at least $ 5 million more than it would have been otherwise. Venture leasing had literally created millions of dollars for Berman’s shareholders.

Like Berman’s firm, a growing number of venture capital-backed startups are taking advantage of venture leasing to build equity value faster and to expand infrastructure. What is venture leasing and why has it become so attractive to venture capital-backed startups? How are savvy entrepreneurs using venture leasing to increase shareholder value? To find answers, one must take a closer look at this important financing source for venture capital-backed startups.

The term venture leasing describes equipment financing provided by equipment leasing firms to pre-profit, early stage companies funded by venture capital investors. Like Berman’s firm, these startups need business essentials like computers, networking equipment, software, and equipment for production and R&D. These firms generally rely on outside investor support until they prove their business models or achieve profitability.

Where does venture leasing fit intorepparttar 112090 venture financing mix? The relatively high cost of venture capital compared to venture leasing tellsrepparttar 112091 story. To compensate venture capitalists forrepparttar 112092 risk they take, they generally receive sizeable equity stakes inrepparttar 112093 companies they finance. They typically seek investment returns of at least 35% on their investments over five to seven years. Their returns are achieved via an IPO or other sale of their equity stakes. In comparison, venture lessors seek a return inrepparttar 112094 15% – 22% range. These transactions amortize in two to four years and are secured byrepparttar 112095 underlying equipment. Althoughrepparttar 112096 risk to venture lessors is also high, venture lessors mitigaterepparttar 112097 risk by having a security interest inrepparttar 112098 leased equipment and structuring transactions that amortize. Taking advantage ofrepparttar 112099 obvious cost advantage of venture leasing over venture capital, startup companies have turned to venture leasing as a significant source of funding to support their growth and to build equity value faster. Additional advantages to startups of venture leasing includerepparttar 112100 traditional leasing strong points --- conservation of cash for working capital, management of cash flow, flexibility, management of equipment obsolescence, and serving as a supplement to other available capital.

How to Avoid Credit Card Late Fees

Written by Daryl Flagg


Everyone hates late fees and being late will cost you dearly these days. For some credit cards today, if you are late, you will have to shell out as much as $40 each time. This can put a nice sized hole in your pocket really quick.

Below, I will provide you with some tips and strategies on how to steer clear of those monstrous late fees. This will not only save you a lot of money inrepparttar long run, but it will also keep those money-hungry credit card companies, I won’t mention any names, from getting your hard earned money.

Just pay your bill. One ofrepparttar 112079 easiest ways of avoiding a late fee is to just pay your bill each and every month by sending in a check, money order, or other type of payment to your respective credit card issuer. Just make sure you followrepparttar 112080 numerous guidelines, which are usually outlined onrepparttar 112081 back of each credit card bill, on how to send in your payment. These guidelines must be followed precisely if you want to guarantee that your payment will go through on time.

Payment guidelines may include everything from a specific payment address torepparttar 112082 time of day by whichrepparttar 112083 payment must be received to be credited that day. Many issuers also stipulate that payments must arrive inrepparttar 112084 preprinted envelope sent torepparttar 112085 customer.

Whilerepparttar 112086 Fair Credit Billing Act requires issuers to credit paymentsrepparttar 112087 day they are received, each issuer is allowed to set specific payment guidelines. If any ofrepparttar 112088 guidelines are not met,repparttar 112089 issuer can take as many as five days to creditrepparttar 112090 payment.

An on-time payment could easily become late during that five-day period, so follow those payment guidelines carefully.

Just skiprepparttar 112091 payment. One ofrepparttar 112092 more rare types of methods you hear of are Skip-A-Payment services. You can use these services to skip mortgage, credit card, or loan payments. Usually you would need to get in contact with your bank just to see if you even qualify or not. There are also independent companies out there that will allow you to dorepparttar 112093 same thing, no matter what bank you are a member of. Depending on whose service you use,repparttar 112094 fee’s associated with it vary. When you use these types of services make sure you know how much you will be charged then decide if it’s worth it or not.

Pay minimum due immediately. One ofrepparttar 112095 best ways to prevent a late fee from being charged to your account is to payrepparttar 112096 minimum due immediately. As soon as you receive your bill, send inrepparttar 112097 minimum due. This will always insure that your credit card issuer received payment. You can always send in more money later if you decide otherwise. This is a great way to avoid missing a payment because if you forget to send extra money you can guarantee that you won’t be charged a late fee becauserepparttar 112098 minimum due has been already been paid.

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