Reflection of Venture Capitalist Post Discussion Need a discussion reply for this below: Being awarded a government contract is money in the bank. Their c

Reflection of Venture Capitalist Post Discussion Need a discussion reply for this below:

Being awarded a government contract is money in the bank. Their checks very rarely bounce and it can open the door and develop a future business relationship. If a government entity is offering a contract, your company has proven it can deliver. That being said, your company should have capital to float payroll and expenditures from past deals. A common business practice is not to pay for a product or service until such is delivered. Applying for a bank loan would be the first avenue stream of money. This made include rates that would effect the bottom line and may have to be factored into the overall bid. The concern with a bank is they may not feel the terms make sense. A secondary possibility would be to open the idea to short term investors. This would be similar to asking money from venture capitalists. This maybe simpler then seeking a bank loan and the terms more favorable. The investor could ask for a stake in the project or you could sell shares of your business to raise the capital.

Ganti, A. (2019, May 19). Venture Capitalist (VC) Definition. Retrieved from https://www.investopedia.com/terms/v/venturecapita…

Need a discussion reply for this below:

Keeping the company afloat while not getting paid for a year would take some serious planning. Before taking on this big challenge I would need to make sure I had everything in my budget, all assets and liabilities along with a serious cushion for unexpected events that might happen to the business or even personally. Having at least six months salary in savings would allow positive cash flow but in reality it is very difficult to do this. Another option would be is to reach out to previous accounts that have unpaid invoices and try get that collected as soon as possible, when receiving money for accounts receivable this will free up cash for other things.

While I take on this particular job, I can also find another way to create revenue for myself. If I take on a hobby or contract work part time or full time this will allow revenue to continue during my time to keep my company afloat while waiting to get paid from this big job. I have to keep in mind that this will be difficult and maybe the side jobs will make up the difference until I collect from the Federal Government which could potentially give me several more jobs in the future.

Both discussions from my classmates are referring to this paragrah below:

Congratulations! Your company just won a lucrative new contract with the Federal Government to supply widgets for a total value of $50 million. If you perform well and on time on this job it will open the door to hundreds of millions more of future sales. The only problem is that you won’t get paid until at least 60 days after you deliver all those widgets 9 months from now – in other words, you won’t get paid for a year. How do you keep your company afloat until you get paid?