A friend bought a startup that had raised $40 million for $150,000 after its investors wanted to write off the loss. The company now generates cash flow. The speaker argues that deal terms matter more than the headline price when acquiring distressed assets.
What if I told you that you could spend pennies on the dollar to buy a company that had raised over $40 million? So my friend learned that a company was shutting down and he reached out to the venture capitalists and said, hey, I learned that this company is shutting down, would you be willing to do a deal? And typically VCs want to write off their deals and quickly move on to the ones that they think will be home runs. And so basically he negotiated a deal where he put down $150,000 for, again, a company that raised over $40 million, turned around the company, and now that company spits out cash. Oftentimes when you do a deal, it's really the terms that hold more weight than the price itself.
