Hi Fabien, First, let me assure you that Iâm a big fan and an admirer of what you have accomplished and that the following words have been written in all respect.
Working as an investment professional in the asset management industry for 10 years at a shop that also run VC operations and having been part of building a company with VC backing I have my reservations. I fear you are playing with fire here. 3 mio is not a heap load of money to raise. I know, they bring "more than just equity, they bring expertise, connections, ...". If you knew how many times I have heard these words while a young entrepreneur has been lulled into false certainty about the VC real cunning plan. And it always starts with a minority stake. I sincerely and from all my heart hope the following scenario will not come true. If you feel like it, take it as a warning. Scenario: Given its past cash constrains Tiny has an organizational back log. The development of the organization has not kept pace with the company's, the products and the community's success. Now that cash is ample Fabien gets slightly carried away, after all he has built and enterprise value of over 10 mio EUR in only five years. He rightly sees a chance to solve the structural deficits and jacks up the running cost base beyond the current carrying capacity of operating cash flow. The higher running cost are seen as "investments" to leap frog to the next level and negative free cash flow is hence accepted as s temporary phenomenon on the road to success. However, compared to the business plant the future cash flow takes twice as long to materialize. Openerp sa runs out of cash and need to go back to the VC to beg for more. Fabien will be surprised by the sudden change in tone..... Honestly, 3 euro for slightly under 30%? It feels to me that an EV of around 10 euro is on the low end for what you have built. Next time you need to raise equity, why not turning to the community. We'll set up the OpenERP Community Finance Holding AG in Zug Switzerland or other places and sell the shares to the community in an open source style fund raising. We agree on a tag-along-drag-along for all future equity transactions. The community votes on the board of the financing company. Would you know an investor that better understands to logic of open source and that would have more full faith in you, Fabien, as our entrusted Editor than the community? The community finance approach would align the interests of the shareholder with the interests of the Editor. For an open source endeavor the equivalent for the good old "family and friends financing" is obviously the community. Now wouldnât that really bring open source to the next level of economic logic? What other community if not one dealing with a erp system should be full of entrepreneurs ready to step in? Dear community, am I the only guy here on this forum that is ready to put money into Fabien's shop? Best regards, cj -------------------- m2f -------------------- -- http://www.openobject.com/forum/viewtopic.php?p=51399#51399 -------------------- m2f --------------------
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