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Marketing Alliances
& Partnerships
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Equity
Trades How
do new businesses make purchases on barter when they have not yet come
to market with a product or service, but have immediate buying needs?
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".
. . It makes sense that startups would want to use options as a
form of currency. It doesn't cost them anything up front, and it makes
them feel like service providers have a more vested stake in their
success. So far, startups [have only bartered] stock for services like
legal counsel, public relations, or consulting. The practice of
trading options for products . . . hasn't caught on." "Traditionally,
technology firms opt for stock-for-service deals because they lack
cash . . . . Companies often venture into barter agreements because
the service provider is better motivated to create growth in the
company if it owns stock . . , and these equity investments can be
highly profitable since the value of successful technology firms tends
to multiply rapidly." |