So, Mike and the others are getting desperate. And something that had been kicked around for a long while non-seriously was now on the table. Forgive me if I explain any of this wrong, I don't know what I'm talking about here, just repeating things I've heard half-assedly.
It's called a "reverse IPO". Some other corporation that has went public, bit the dust, and exists only in lawyer's paperwork. You end up buying said company, offering stock for your formerly non-public company through it. Moreso, there are companies that specialize in this sort of thing (and we sure as hell can't afford to be buying anything).
So they get 10% (I think, may have misheard) of our company, and in 3 months they've got things ready to be selling shares of our company. Another 10% of it or so, for $2.5 million. In the meantime, they agree to front us operating capital (whether this was at a level where I get my salary back no one bothered to tell me). Also, if things aren't ready in 90 days, they continue to pay operating expenses until they are.
It all sounds fishy to me. It smacks of desperation, and I wonder how likely we are to land the big deals with the record companies that are in the works if we look desperate.
They're talking as if the ipo thingy deal will be finalized by the end of November.
I continue to look for another job.
Mike's in California. Supposedly we still have a good shot at landing a deal with Warner Music (and another similar with Sony) that could be worth a million or so revenue per touring season.
If this does go public, do I sell my 10,500 stock option shares as soon as I can, or hang on to them? Lots of music startups have failed these past few years, why would ours be different?
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