Crowdfunding Not Always A Savior

Can crowdfunding save your company? Apparently not for the inventors of the SlideBelt, a belt used by hikers to survive if lost in the woods.

blackbeltonpole2

Even though the California company was, per the Sacramento Bee, on ” Inc. Magazine’s annual list of the 5,000 fastest-growing companies in the United States, with three-year revenue growth of 328%.”

Its growth required debt financing which quickly overpowered its revenues. The company turned to a Regulation A crowdfunding campaign, hoping to raise about $3 million to pay down its burdensome debt load.

But the crowdfunding fell short by about $2.6 million.

Finding that it “was suddenly overextended on inventory, operations, employee headcount, and financing, rendering the Debtor unable to pay its debts as they come due,” the couple who started the business in their garage in 2007, have put the company into a Chapter 11 bankruptcy reorganization.

https://www.sacbee.com/news/business/article234151247.html

Advertisements

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.