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When convertible debt first started being introduced as a “faster, cheaper way to get startups funded” they didn’t have pricing built into them. ” And some seed stage investors told me, “I prefer not to fight over price now. They’ll get priced soon enough by a VC.” Enter “the cap.”
One of those retailers -- Gamer Doc (www.gamerdoc.com) is based in Newport Beach, and we caught up with Jim Belanger, the firm's President, to dig deeper into why video game retailers seem to be doing slightly better than others. Treating them with respect is a big, important part at Gamer Doc.
We had the final terms of our agreement fairly well boxed in within a range of about 5-7% on price and within 30 days on move-in date. I obviously preferred the lowest price and I wanted the latest move-in date. She told me, “start with the price you want but the move in date he wants.&#. I told my agent. She way annoyed.
Now, that is a nice market to have. A market Check Mate. With less than 45% browser market share and dropping Microsoft is not even situated to control the browser market. Google was smart and fast to promote their Chrome browser, which is biting at Microsoft’s IE market share like nothing we’ve seen in the past.
Plus, when compared to the other laptops on the market, Chromebooks tend to offer the most features for the lowest prices, making them a sweet deal. This works if you base much of your work on online platforms or cloud software like Google Docs, Dropbox, etc. This Chromebook is very high end…with the price tag to prove it.
Me: At what price? Him: It wasn’t priced. So you did raise with a price. It’s just a maximum price. Him: But when I raised my first round we didn’t know how to price the company. How will you price the next round? That way you don’t have a max or min price but you have a price.
He defines this as new products that are dramatically cheaper, lower quality, lower margin but larger markets. The reason that incumbents can’t react is that their revenue and defensibility are continued by serving the high-end of the market for which it would take too much time & money for any competitors to effectively challenge.
We were trying to optimize around a few criteria: price, size of round, number of syndicate partners and, of course, terms. My co-founder and other management team members wanted us to hold off and see whether we could get the deal done at a higher price. By mid September the entire market was constipated. I was resolute.
Let’s be honest – as professional investors we have ALL been to meetings with other groups of investors where we talk about whether there’s a bubble, price creep, etc. But knowing so many people who were there I would find it VERY hard to believe that it was anything other than people BS’ing about trends in the market.
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