looking for a partner (co-invest) in a cash negative Edtech company

by a searcher

1 year ago

Cash negative is always scary. However,  I liked the company and products so much that it is not going away from my mind. I am looking for a partner (co-invest and become CEO) to run an Edtech company. The company has a great product that is well-received by schools and consumers. Revenue is 2 million. Cash negative and has some debt. We can invest around 500k, get hold of the company, and take it to great heights by getting into new geographical markets, increasing usage, and developing new digital products to support and grow fast. Products are so promising that a VC invested around 12 million dollars into them, but they could not run the company properly and divested. . I will get an NDA signed before disclosing the opportunity.

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searcher from London Metropolitan University

This is the problem with falling in love - it’s clouds our judgement. What’s even scarier is that this so called VC sunk $12million bucks and has only achieved 2 million in revenues. There must be a yacht (moveable but reflected as fixed asset in the books) parked somewhere ready to take off. Is the business in a town by the lake or a coast? I am not joking about this - it’s a true story. But that’s for another day. What’s intriguing is that about the VC which conveys the general impression of ‘smart money’. Did the VC not explore these alternative strategies to grow the top-line ? How many years have they had this company in their portfolio? These are major red flags. Do you know the root cause? I am thinking loud here- If a VC with all the resources and smarts they have in-house is unable to turn it around, then what chance do we have? Do you have any turnaround experience? If so, you should disclose it here so people will be encouraged to take this opportunity seriously. Anyway, for what it’s worth, its the people that make a great business not the product. I apologise for making these remarks but I am hoping this will jolt you in seeking the help of a professional accountant from a reputable mid- sized accounting firm, preferably with a forensic accounting background.

1 year ago | like reply | 1 like

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