The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 21 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Schroter: Distressed Founders Can Renegotiate Their Payout Terms Pre-Exit
“One of the things that I coach founders on when they go through this is I say, hey, you know that you can go back and create a new deal for yourself within the company, right?”
Schroter: Distressed startup renegotiation requires a definitive stance, not open-ended talks
“By the time you're going to have that conversation, it needs to be definitive. Dude, I'm out. I'm out of money. I'm out of, like, hell, like my spouse is trying to, you know, is, is tired of dealing with my shit. I need to get out. Okay, now hear me out. Now, …”
Schroter: Distressed cap table restructuring must treat past capital as completely lost
“You have to start with right now, your option is zero. You can't be like, oh, I know we raised that fifty million, but like, you know, this one will only get you five. You'd be like, dude, you invested however much you invested. Sadly, it's gone. We're startin…”
Schroter: People Remember That A Founder Sold, Not If They Made Money
“No one will remember whether or not you made money on the sale, but everyone will remember that you sold.”
Schroter: Startups Drop to Zero Valuation the Minute Cashless Founders Quit
“Usually the founders are like, well, I just raised that a twenty million dollar valuation. And I'm like, yeah, and if you stop working there, the value is now zero. Like, it works there, there's no value. And most founders don't get that.”
Schroter: Bloated Assets Can Be Highly Profitable for Leaner M&A Buyers
“They think that their cost structure, their OPEX, everything else is baked into what it's always been. They forget that that asset in the hands of people that don't have that expense base could be a money machine.”
Schroter: Startup acquisitions require equity upside to close discounted cash deals
“If you don't keep that variable component, what I call kind of the lottery ticket in the deal, it is very hard to negotiate a cash purchase.”
Schroter: Startups.com Achieved a 50x Return Acquiring Distressed Startups
“To put that in perspective, we've made a 50 X return on our investment by buying what other people would call failed startup, right?”
Schroter: Cash-poor startups get abandoned despite having valuable assets
“When a startup runs out of cash, everybody kind of runs for the hills. The founders are like in a broken cap table where they have no upside, so like, hey, I'm out of here. The investor is like, well, hey, there's no one to run it, and there's no money, so we'…”
Schroter: Distressed startups have only three potential buyer categories
“I said, here's three buckets that you're going to wind up in either private equity, which is only an option if you have revenue, right? The second is a strategic buyer, which is always your best case, but there aren't that many in the likelihood that they're w…”
Schroter: Large VCs prefer equity roll-overs to trivial cash returns
“Bessemer or folks like them would prefer to be able to have their stock just moved over to another entity that would likely do something with it and hopefully have an outcome down the road so they don't have to write it all down”
Schroter: Acquirers care about revenue, not the startup's venture narrative
“You can't just sell the venture story to the world. Like nobody gives a shit. Do you have some revenue? People understand that.”
Schroter: Distressed Startups Rarely Sell Above Their Liquidation Preference Hurdle
“In a lot of cases, by the time you get to this point, even if you've only raised a few million dollars, the likelihood that you're going to sell something and get over your preference hurdle is usually pretty low”
Schroter: VCs Usually Write Off Failing Startups Long Before Founders Realize
“By the time you get there, investors knew this a long time ago. I mentioned that company that I did back in the mid-two thousands called Affordit. By the time I was like, guys, you're not going to believe this. We're going to have to shut this down. They were …”
Schroter: Startups.com only does asset purchases, never acquiring operating entities
“We always do asset purchases. We never buy the actual operating company. There's never any upside in it.”
Schroter: Struggling founders often ruin their lives before realizing they can quit
“And frankly, having met with thousands upon thousands of founders, I have hardly ever met a founder at the end of this that's just like, ah, I just, my feelings were hurt, so I had to leave. By the time I'm talking to folks, or even, you know, before then, the…”
Schroter: Acquiring One Million Startup Customers Failed to Deliver Cross-Selling Value
“I've acquired over a million startup in all the acquisitions that we did. Right. So a million customers on paper that should have yielded me Orders of magnitude of value, cross-selling products, et cetera, never happened, right? I mean, parts of it happened a …”
Schroter: Low-MRR startups can sell to individual operators when PE passes
“When you go to PE, it has to be a lot because it has to be worth their while. When you go to strategics, it has to be a lot. But if you've got 50 K and MRR, there are a lot of people that could just take over that business.”
Schroter: Most startup acquisitions are not bought with upfront cash
“Most of these companies don't get bought with just a big check cash on the barrel head.”