Lets not forget that Colinton are also getting far and away the best deal:
- a substantial fee for providing the lifeline (was it $800k? can't remember atm)
- the bulk of their funding is debt funding $5 mil compared to ~ $3 mil equity
- this means they have first priority to any earnings in the form of the 6% interest
- if things go well, their debt becomes equity
- if things go badly they have first dibs on reclaiming their investment (their $5 mil debt comes first if the company folds or is sold for parts)
Ann: Investor Presentation - Fully Committed $22.3M Capital Raise, page-57
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