To: David Sirk who wrote (682 ) 7/11/1999 2:56:00 PM From: Zeev Hed Read Replies (1) | Respond to of 1438
Dave, I have help put together few small start up outfits, believe me, when getting money for such start ups, I have to be ready with many more answers, than the six I suggested you start with. Current share count should be a problem to disclose? Size of debenture should be a problem to disclose? Sales projections and long range strategy (typically a one sentence "corporate purpose" statement), what is the maximum negative cash flow expected (which together with how much money is in the bank will already give you how much more cash you need to raise), are all questions that a Pres. should have at his fingertips, whether it has been in operations for five months or plan to get into operations in a year. These questions are not "fair" or "unfair" these are essential minimum. The answers to these questions can also set yard sticks against which to measure a company at management ability to execute in the future. From the little the company tells us in its press releases we know few things as facts, they have a floorless (we do not know how much and what part of total capitalization that is), and we know that they are on a "buying binge" of very diverse type of businesses. Either the guy is an uncommon genius, or he is going to fall on his face flat. That is what experienced business managers will tell you, of course, if we had more information we might be able to tell more. You are recommending this investment based on instincts and hope of $10/share, and I oppose your instincts with my "instincts". My instincts are based on having run small companies before, and these "instincts" tell me that lack of focus is a formula for a disaster. Thus I recommend that everyone stays absolutely clear of this company. Since you rely so much on the Pres. character and contacts, it behoove you to thoroughly investigate his background. Can you tell us what companies he has run before this venture? By the way, do you find anything wrong with the rationale of my recommendation, based on what you and I know to be the only facts? Zeev