Cambridge Cluster

Image via WikipediaI hope that there are no entrepreneurs in the Cambridge Cluster who have to take on money at the Buffet’s rates.  His deal with Goldman Sachs was $5billion of preferential shares with a 10% coupon (or yield) plus the option to buy $5billion of ordinary shares in the bank at $115 a share at any time in the next five years.  This gives him an instant $437million profit on the closing price when the deal was struck of $125.05.

Let us hope that most Cambridge Cluster companies have sufficent runway to keep trading, with tightening of the belt, to last out until there are better terms around.  It is a down round leading to dilution of existing investors but not a wash-out round.

Not quite the business plan expected of the likes of Goldman Sachs.