seaking

Thanks for the candid thoughts, Udo.

Some brief comments on your response:

- Unfortunately, we have some business-critical costs we incur, so can't do a full slashing. However, we're confident that a couple key vendors that our business relies on will defer payment for a couple months, representing a 50% reduction to burn. We could probably also reduce general costs by 10-20% as well with some real belt-tightening.

- You're probably right about the revenue projections, but we do have our reasons to be optimistic. At minimum, some quick revenues will help make us that much more compelling to other investors if we chose to walk from this deal and throw a hail mary trying to land another investor in the 2 months we'd have to put a deal together.

- We're placing a lot of resources in quickly brokering a distribution deal with a marquee brand in our space. We're extremely confident that we will have something in place in the next two months if our progress thus far is any indication. Landing any of these deals would likely solve our immediate-term money woes, at least enough to stop the hemorrhage.

The question basically comes down to:

Do we take a deal on the table knowing that it will give us 10 months of certain life even though it doesn't feel right in the gut and doesn't even look that good on paper by most measures? Or do we roll the dice, go into bleed mode, and try and land something in the 60 days we'd have to do it (starting Monday), knowing that it's a horrible time of year to get anybody's attention?

Thanks again for the thoughtful response, Udo.

No revenue yet. Our first campaign launched yesterday, and one of our sites is seeing the first hits trickle in now.

Yea, we've been wondering that ourselves. :)

We've already gone through the DD process with him and his lawyer, and a new shareholder's agreement has been drafted. It has verbiage in it that basically allows him to come on as a voting shareholder, with the ability to ascend to a director once he feels "he is ready".

His readiness is mostly contingent on industry knowledge. We're in a space that is largely unknown to him, and he wants to take the time to bring himself up to speed before taking a more active role in the company.

One of the reasons we're feeling trepidatious is that we haven't spoken to the man since August, save two email. The rest of our interactions have been with his lawyer, who, while civil, has been a bit onerous to work with.

We're just not sure if this is an indication of how our relationship will work going forward, or if this is merely a difficult courtship period that could result in a truly beneficial working relationship down the road.

Ah yes. My apologies.

Our current burn rate is about $20k a month, which includes modest founder salaries (not quite enough to pay the bills, but it helps).

Most of our burn is actually for third-party data providers, which are essential to our business at this time.

We do think we're close to revenue, but it may be a few months longer before we're actually cashflow positive.

I'll be honest -- there's a divorce between our heads and our guts at this time. From a business perspective, it makes sense to keep the lights on and see where this thing goes. If we walk away from this deal, we put the company in serious jeopardy unless we can find an accelerated path to revenue. So the head says yes, but the gut says no.