Let's start with a hypothetical: Tough Times, Inc. is in the
market for another round of financing. By "in the
market," we mean they have spoken to dozens of ventures funds,
have had first meetings with many and second meetings with
some—via Zoom, of course. Tough Times has raised prior rounds
of financing at very favorable terms and valuations over the course
of the past three years, has double-digit revenue and before the
COVID-19 pandemic was looking at a stellar 2020. Then in March
things started to go sideways for Tough Times—some clients
cancelled, some prospects didn't sign their contracts, their
revenue forecast needed to be changed, they had to lay off some
people, they reduced salaries... Sound familiar? Now, in order to
stay alive, Tough Times needs an infusion of capital. What are they
in for?
