Buffer raises $3.5M

Re:Buffer raises $3.5M by sashagim on Monday October 27, 2014 @04:07PM (#8517860)

If one of the founders is reading - why not taking the money in the bank as dividend right before the fund raising (with full disclosure to the future investors, of course). You get a similar amount of money (although sharing it with the early investors), but all the money you're raising goes to the company, which I assume is a simpler model. Wouldn't that be simpler?

Best of luck with completing the round, and with future growth!

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Re:Buffer raises $3.5M by leowidrich on Monday October 27, 2014 @04:14PM (#8517902)

Yup, great questions! We considered a number of things: dividends, loans, buying back shares without raising money, debt. Dividends for a c-corp are taxed super high (big fan of paying taxes, but you end up paying something like 60-70% tax, not a good idea!). So raising extra cash with minimal dilution (2.5% for this round) was most efficient.

Right now, all money raised goes to company, then company buys back shares from early team members - investors still get preferred stock. We're not selling our common stock directly to investors - you're right, that'd be too complicated and not in investors interest.

Would love to answer more questions on this, keen to explain our full thinking!

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Re:Buffer raises $3.5M by sashagim on Monday October 27, 2014 @04:20PM (#8517940)

Interesting, thanks!

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