When debts are piling up, product market fit isn’t happening, and the runway seems to be getting shorter and shorter, a startup must often face the daunting prospect of a wind-down. In this intricate process, managed escrow services become critical (see Dr. Doom’s story: The Painter, The Napkin, and the Escrow). As someone who has...
Lately, we’ve heard tales from our beloved Dr. Doom, a Chief Restructuring Officer who can help turnaround, or wind-down a startup depending on the circumstances. Here are 5 key takeaways from some of his lessons to avoid bankruptcy court: 1. Get Ahead of It: The Six-Month Runway Rule In the high-stakes game of startup survival,...
Trigger Warnings: Rich People Problems Several years ago, a famous painter passed away, the end of his life complicated by the problems of the wealthy: many heirs are laying claim to his artworld throne. The news came to me, Dr. Doom, not through the gossip of the art world but via a terse, unexpected phone...
It’s official: Your startup has entered the Zone of Insolvency, and you’ve hired a Chief Restructuring Officer to help you liquidate your startup assets and repay your venture debt creditors ASAP. You’ve been told an Assignment for the Benefit of Creditors is the best solution. Still, there are two types – a “Prepack” Assignment for...
In our first post, Strategic Buyer: Beware, our startup founder, Margaux, realized a strategic investor initially showing enthusiasm to invest in her startup used a string along tactic to buy her startup for pennies on the dollar. What are some steps Margaux could have taken to avoid a tragic outcome? Tips for Avoiding a Strategic...
The term “Zone of Insolvency” often floats around in financial and legal circles, but pinning down its meaning is like trying to catch smoke with your hands. No mathematical formula or financial algorithm can reliably signal when a business enters this nebulous zone. The irony is that you usually only realize you’ve been in this...
Unlike traditional Venture Capitalists, whose primary interest is to see a return on their investment, strategic investors often have ulterior business motives. They might be interested in the start-up’s technology, customer base, team, or blocking competition. It’s crucial to discern why they’re interested in the first place. One main attraction for strategic investors is the...
At Ravix Group, we understand shutting down your start-up can be confusing, challenging, disheartening, and emotional. Here are key terms to help you better understand a vernacular you hoped never to have to know: Assignment to the Benefit of Creditors (ABC): A state law insolvency proceeding wherein a company voluntarily transfers its assets to a...
What is an Assignment for the Benefit of Creditors (ABC)? An Assignment for the Benefit of Creditors (ABC) is a state law insolvency proceeding wherein a company, realizing it cannot continue its operations and meet its financial obligations, voluntarily transfers all its assets to a third-party assignee. The assignee then takes responsibility for liquidating the...
From the Desk of Dr. Doom, Chief Restructuring Officer: Trigger Warnings: VC indecisiveness, looming debt I landed in Nashville last night after a call from a friend investor, Beatrice. Always intelligent and direct, Beatrice got straight to the point. “I need your help,” she began, her voice devoid of any fluff, “I have an amazing...
