51–60 of 453 posts
It got so bad that he was taking money from company account paying for drugs. Eventually arrested, lawsuits followed and now he's sitting in jail. Just a genius that couldn't control himself...
My first startup failed because I had no idea what I was doing. I started an online vacation rental site, similar to vacationrentals.com vrbo, homeaway etc... I was getting traction and had people list their rentals on my site but I failed to collect any revenue. The thought was, build it, offer it for free to grow it and then charge. Well, I built it (wasting way too much money on an original solution when existing…
How long ago was this? Was it a specific region or all over? Did you try to raise funding or it was all bootstrapped?
I chased and successfully won a huge customer for my small and fledgling startup. I chased and successfully won a sole service contract for a key part of their business process. I allowed a credit situation with them to grow over the course of 3 months while I allowed them to have 60 day terms. And then, they went out of business and left me holding the bag with $150,000 in unpaid AR after I spent $90,000 generating…
^ this is real talk. Big companies love to be behind on AP for a variety of reasons, among them: - Their own 'highly matrixed' organizational structure makes it near impossible to find 'the correct person' to talk to about accounting issues, let alone get a straight answer out of them - so chasing these issues down becomes a huge drag on your time and energy and you may very well just give up after a while - Past-due…
Earlier quoted context omitted.
A lot of this is probably true, but it's really to your benefit to understand, as a businessperson, that this is generally how large clients expect to conduct business. You can fight it and even establish better payment terms, but it isn't always worth it. It's usually cheaper just to build a business that is resilient to late payments. Over the last 15 years or so, a lot of my best customers have been super-late pay…
You can get credit specifically to solve for that issue, usually at reasonable rates. Short-term small business loan facilities exist. Another decent option if you're reasonably sure you'll receive payment NET30 are credit cards + an online bill-pay service like Plastiq.
I personally have helped out a few businesses with a 2% CB CC (which helps offset the Plastiq fees) that offers a 6-mo 0% APR term but the CL is the limit of the loan which limits the extent of the loan.
Most CCs don't have such gracious terms in which case you could be paying a hefty fee to gain that cashflow.
Having done this a few times, my conclusion is that this is a very bad practise and exposes a business with cashflow issues if this is a regular occurence.
A healthy AR is better than no AR but you know what's even better?
A healthy cashflow.
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You are getting me really curious now. I have tackled this issue (late payers) in two ways: 1. My cashflow from other investments ensure I did not run out of money. This is a bad design where I am effectively extending a 0% APR loan to the client with a term of their choosing 2. When I have ARs large enough to entice "parties that handle payments", I choose to let them handle the invoices on my behalf for a cut. A pr…
You can always ask for a retainer, too.
I size the prices with the retainers. Bigger the retainer, higher their priority and less the per project prices.
Our founder went off the rails and developed a substance habit. It got so bad that he was taking money from company account paying for drugs. Eventually arrested, lawsuits followed and now he's sitting in jail. Just a genius that couldn't control himself...
This and mental issues are some of the darker sides of startups that are not discussed a lot.
Our founder went off the rails and developed a substance habit. It got so bad that he was taking money from company account paying for drugs. Eventually arrested, lawsuits followed and now he's sitting in jail. Just a genius that couldn't control himself...
Earlier quoted context omitted.
^ this is real talk. Big companies love to be behind on AP for a variety of reasons, among them: - Their own 'highly matrixed' organizational structure makes it near impossible to find 'the correct person' to talk to about accounting issues, let alone get a straight answer out of them - so chasing these issues down becomes a huge drag on your time and energy and you may very well just give up after a while - Past-due…
Turning off a customer and refusing to turn them back on until the wire hits the account solves all kinds of problems.
I have excellent clients who could not afford to pay for a consultation because they themselves were waiting on the client they were farming out jobs from.
They still work with me because they know I understand their cashflow issues.
I chased and successfully won a huge customer for my small and fledgling startup. I chased and successfully won a sole service contract for a key part of their business process. I allowed a credit situation with them to grow over the course of 3 months while I allowed them to have 60 day terms. And then, they went out of business and left me holding the bag with $150,000 in unpaid AR after I spent $90,000 generating…
After 2 months of not paying myself or any other employees, the COO and I drainked the remainder of the US account and paid out as much of what was owed as we could to the employees before helping them find jobs elsewhere. I didn’t get any of the money I was owed and was facing pretty bad debt, but the experience was enough of a resume boost that I didn’t have a problem making it up in my signing bonus.
What I learned is that a title doesn’t grant you any control, and that if someone can’t be transparent with their inner circle of friends and colleagues (in this case cofounders), then they have no business leading a company.
Also leaned to not fuck with the cartels.