As I've stated before, I don't think the terms of this sale are all that bad. Given that Provo leaders want out of the telecom game, this is not the worst way to do it. However, I'm beginning to really think that Broadweave is not the company to pull this off. They don't have a good business model, they don't have much video experience, they don't have much operations experience. They are talking about walking in and changing a bunch of stuff. This is scary.
On the other hand, you have two companies of exactly the right size, experience, and incentive to get this right. They are both operating profitably. The only problem is capital. Yes, I'm talking about Veracity and Nuvont.
So, given that the deal is good, and the city wants to do this deal, why not deal with one of the incumbent providers? The only place where they lack that Broadweave does not is Sorenson Capital. In every other respect they are a better choice than Broadweave.
So Nuvont, Veracity, call your rich friends ASAP. Show them the deal Broadweave's getting, propose some equity. All they have to put up is a 2 year, $6 million dollar guarantee to pay $268K per month rent in the event of your failure. Given your track record, it's a really good investment. Pipe up to the city council by May 27. I'll be really surprised if they aren't willing to listen.
I wish I had $6M to promise. Sounds like a slam dunk to me.
Wednesday, May 14, 2008
Subscribe to:
Post Comments (Atom)
1 comments:
I feel the deal is bad on most accounts. This sale is purely a short-term political sale. It isn't a deal for the taxpayers as they still shoulder the debt. It is purely a tax subsidized deal not done in a manner to optimize profits to the original investors (the tax payers). Ironically, this sale is pleasing the "free market" folks by giving a tax subsidized gift to a ill-prepared business that has political savvy. My vote is for Jarrod to be named the new iProvo Czar and fix the systems as he outlined.
Post a Comment