

Ask HN: 2 weeks to save the business you spent 4 years on - LondonWebDevUK

We have just lost our biggest client who represented 50% of our business and have now found ourselves in a position where we have 2 weeks to save the business we have spent the last 4 years working on.<p>The business has $193k of assets (hardware, depreciated value) but we need about 60% ($115k) of this value which can be secured against the assets but don&#x27;t know where to turn.<p>This has been rather unexpected and therefore we are not ready with financials and presentations for investors or the bank.<p>If we can replace this business over the course of 1 year, our projection shows $600k in the bank by May 2016.<p>We need to find investors who have some tech resource so that they would consider an investment based on security of the assets alone. The hardware itself is what generates the income.
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brudgers
[Disclaimer: I am just some person on the internet with an opinion and full
enough of myself to share it]

My gut tells me that you'll probably be better off financially pulling the
plug and liquidating than taking the terms typically offered to a firm that is
about to go under. Two weeks is rarely likely to be enough time and anyone
interested in the assets can sit back and wait for the opportunity to purchase
them in the near future. There's not much upside to taking them as collateral
on a loan in a non-equity transaction. Anyone optimistic enough to sink money
in will probably want something sweeter (e.g. a share of future revenue) plus
the assets as collateral to compensate for the risk. Such a person will be in
a position to drive as hard a bargain as they want. There's just no time to
obtain multiple parties and negotiate from strength.

The four years spent building the business are sunk costs, and if the business
is about to die it's often better and less painful to kill it off and start
again than drag out the suffering.

Good luck.

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wiggums
Are you publicly traded? If so, maybe you can do a
GoFundMe/IndieGOGO/Kickstarter campaign and offer shares as prizes for
support...and then when that 600K revenue kicks in, peoples' investments will
offer a higher return for them...

Also, social networking. Get trending on Twitter.

Just my 2 cents.

Good luck!

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MalcolmDiggs
It seems like you have a few options:

1\. Get your financials together very quickly, and go down to every credit
union and bank in your city (asking for a collateral-backed small business
loan). A week is plenty of time to write these things down, you don't need a
fancy powerpoint, just numbers.

2\. Sell 115k of the assets quickly, keep 78k of them, keep running the
business (on a smaller scale) and slowly build your assets back up.

3\. Declare bankruptcy to get a stay-of-execution from whatever liability is
coming due in 2 weeks. This would, at least, but you a little time. Not sure
of the bankruptcy laws where you are, but in the US, your assets would either
be auctioned off, or you'd set up some kind of payment plan with your
creditors, depending on the type of bankruptcy you elected... and then you'd
slowly work your way out of it.

4\. Open up a line of credit for the business, or get a line of credit on your
personal assets (like a HELOC on your home). I'm not a fan of either option,
but if you're in need, you might want to resort to those.

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pairing
Really tough to hear. Here's some inspiration:
[http://techcrunch.com/2013/10/19/phil-libin-
evernote/](http://techcrunch.com/2013/10/19/phil-libin-evernote/) I remember
hearing about how they were saved last minute by a customer/investor at
startup school 2 years ago.

Any way to woo the customer back? Show up at their office tomorrow morning and
convince them to stay or at least keep some of the account with you? Maybe
convince them to give you a bit of a window? They might have no idea that
leaving your company will cause your company to fold.

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lazythrowaway
Lenders like OnDeck can loan a business roughly 10-15% of your annual revenue
in a day or two.

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dmak
Wow, this is like Sterling Cooper Draper Price losing Lucky Strike. I wish you
the best of luck!

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droidist2
Haha, I thought of the same thing.

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Gustomaximus
This made me think of this article by PG. Good luck

[http://paulgraham.com/pinch.html](http://paulgraham.com/pinch.html)

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cubecul
No good advice from me, just well wishes. Hope you can stay calm, break down
your problems, prioritize and drive forward.

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penguinlinux
What is the company URL ?

