Comments on: Several more real costs of taking outsider investments. https://berkonomics.com/?p=3234&utm_source=rss&utm_medium=rss&utm_campaign=several-more-real-costs-of-taking-outsider-investments Dave Berkus' business insights Fri, 29 Dec 2017 23:06:40 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Michael O'Daniel https://berkonomics.com/?p=3234&cpage=1#comment-113422 Fri, 29 Dec 2017 23:06:40 +0000 https://berkonomics.com/?p=3234#comment-113422 However, none of these considerations can compare with doing marketing for a CEO who thought our primary marketing strategy should be delivering baskets of fruit to neighboring businesses. I am not making this up. Happy New Year!

]]> By: Michael O'Daniel https://berkonomics.com/?p=3234&cpage=1#comment-113373 Wed, 27 Dec 2017 18:52:24 +0000 https://berkonomics.com/?p=3234#comment-113373 One of the points at which companies are most vulnerable is when another round of funding is required to keep the company afloat, and in particular when original investors are being asked to take a cram-down in their valuations.

]]> By: Dave Berkus https://berkonomics.com/?p=3234&cpage=1#comment-113329 Tue, 26 Dec 2017 18:40:33 +0000 https://berkonomics.com/?p=3234#comment-113329 In reply to Michael O’Daniel.

Michael,

I have had the identical experience with a VC investor dictating the direction of a company that was profitable and growing, but not enough for the fund he represented. His “suggestions” turned out to be received by the board and CEO as “orders” and ultimately killed a good company that could have continued it growth profitably for years. I am sure many readers have similart stories. Thanks for yours. – Dave

]]> By: Michael O'Daniel https://berkonomics.com/?p=3234&cpage=1#comment-113325 Tue, 26 Dec 2017 17:40:41 +0000 https://berkonomics.com/?p=3234#comment-113325 And, I should add, knowledgeable about the company’s capabilities to follow the path the investor thinks it should take.

]]> By: Michael O'Daniel https://berkonomics.com/?p=3234&cpage=1#comment-113324 Tue, 26 Dec 2017 17:39:17 +0000 https://berkonomics.com/?p=3234#comment-113324 They can also force the company into directions that are counterproductive to its growth and its financial health. I’ve worked in two companies that were leaders in their market space until investor board members insisted that they pursue “opportunities” that turned out to be pipe dreams. Cautionary tale: the agenda the investor brings to the boardroom is not necessarily the one you’ll wind up with once that investor begins influencing corporate decisions, compounded by the fact that said investor may not really be all that knowledgeable about the market.

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