Earlier in the month, Duane Jackson, CEO KashFlow posted his experience in raising a new round of finance. It had not gone well. At the time I decided I would not comment since we had an upcoming meeting scheduled. It was clear the experience had left Duane tired to the point of exhaustion. At the time, I said the best thing would be to go away, forget about it and the right answer would emerge. That answer – or rather an intriguing tidbit of an answer - turned up in a Tweet message from Duane:
My chairman/business partner/co-shareholder/mentor, Lord Young, has just agreed to provide the capital for my aggressive expansion plan! : )
The company is keeping the details under wraps for the time being but I expressed my view that this is a sensible move. It keeps the business under the control of the founders so their equity is not diluted as a group, demonstrates faith in the business by Lord Young while allowing Duane the flexibility he needs to take KashFlow to the next stage.It also removes uncertainty in the market that could be used as a piece of FUD by competitors.
The company is not saying much about what happens next but it is my understanding that it is looking for rock star senior management in a number of areas. This will remove the day to day pressure from the CEO having to wear many hats. Again, the right thing to do.
We’ll see in the coming days just how much capital the company has raised, at which point it will be possible to say more about what this means for the market as a whole. In the meantime, I imagine that Duane will sleep a lot easier than of late.