The Options for Finding Cash to Keep the Company Afloat during the Developmental Phase of a New Product

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There are a number of options for finding cash to keep the company afloat during the development phase of the new product. Some of the different options include a public share issue, a debt issue, a bank loan, venture capital and mezzanine financing. A public share issue can be done, selling equity on the public markets. At present, this option does not look particularly viable for a couple of reasons. The main reason is that the company is in poor financial condition. Equity investors may be unwilling to either buy into the company, or they would do so at a steep discount to what the company might eventually be worth. In the latter case, the company could severely undervalue its equity, constricting the ability of the company to extract value in the future. If it ends up selling a stake greater than 49%, there are also control issues as well that would arise from selling that much equity. A debt issue is another possibility. A debt issue would allow the company's owners to maintain full control over the company. However, there are problems with a debt issue as well. The biggest problem is that the company's cash flow is not great. In order to raise debt financing, the company would need to be confident that it has the free cash flow for the next two years to cover the debt repayments and interest. If this is not the case, then a debt issue is not a viable option. A bank loan is similar to a debt issue, but is a private arrangement with the bank, rather than an

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