Staying Afloat
With his company, ImageCafé, struggling amidst financial uncertainty, Clarence
Wooten, Jr. faced some difficult decisions. With a current burn rate1 of nearly $50,000
per month, the bridge loans2 and Angel investments3 of $710,000 would not be not
enough capital to carry the company to break-even. While struggling to close a $3
million financing round, a Virginia-based Internet-services company, Network Solutions
Inc., approached Wooten about selling ImageCafé. Time seemed to be running out and
closing the $3 million on acceptable terms was proving to be more difficult than Wooten
had ever anticipated.
Should he sell ImageCafé to Network Solutions, or risk losing it all for the potential of a
greater gain, if/when the financing materialized? And if he did decide to sell, what was
the right price?
Time was clearly not on his side.