Would say nothing priced-in, and much casualties ahead of us, behind us, and all-around us.
just received one of many similar to below thread in in-tray, which I sanitised ...
am guessing as public equity might return private equity returns, PE and VC in difficulties, unless ... bailed out of perfect storm
it is fantastic to be a developmental company as opposed to a growth stage company, for competition all as messed up and employees must be laid off for growth stage companies ... years of efforts undone in a few weeks. Perhaps only games in VC / PE arena are cyber companies
Huge debt-free operating companies might shop for necessary bargains
On 4 Apr 2020, at 2:06 AM, G wrote:
Hi S,
Not yet. Besides the call with xxxx this morning, I’ve had a couple of update emails from them throughout the day. No word of a change to the Affiliate rule has been noted, yet. As well, I was just on call with law firm on the same subject. Lots of chatter but no formal notice as of now. We do expect something over the weekend. I’ll continue to monitor and advise.
Best regards,
G
From: S
Sent: Friday, April 3, 2020 4:19 PM
Subject: Re:
I thought the update (as of this morning) is that the VC limitations have gone away
From: B
Date: Friday, April 3, 2020 at 3:33 PM
Subject: RE:
Thanks D. There are a lot of questions related to the nuances of the PPP rules (e.g.,, it appears that the affiliation rules have change and requirements for 20% owners has been amended), and I think it makes sense to wait for additional guidance.
From: D
Sent: Friday, April 3, 2020 1:03 PM
Hello everyone,
We have engaged with xxxx to help guide us through trying to get assistance from the US government due to COVID. At this time there is an affiliation rule such that if we have private equity/venture investment we are potentially unable to access that cash as yyyy is seen as a "controlling" entity.
The choices we have are:
1) Wait for further guidance as the SBA has promised future guidance that may relax the affiliation rule (unknown timeframe)
2) Amend governing documents (with yyyy's approval, board vote and shareholder approval) to temporarily or permanently remove the "offending" yyyy rights that may prevent us from receiving government assistance. Please see attached excel spreadsheet from xxxx who analyzed our documents to see if there were problematic rights (they are around debt, dividends and vesting schedule)
There are two programs one is a payroll support program (PPP). We would be eligible for about $300-$325k of potentially forgivable loans. The second program is a disaster relief program that we are still looking into. That program at first glance requires personal guarantees and company collateral, is not forgivable, but may make more money available. All TBD hopefully later today.
One further complication is we bank with ABC and they do not have this program up and running yet. Other banks do but are indicating they will not service non-existing customers due to the expected large volume of applications.
My sense is we should wait to see if further guidance is available or apply at risk with un-amended documents given the time required to amend such documents - especially for an amount of money that comes nowhere close to resolving our issues.
Open to feedback if disagree
Best,
D |
