In the '80s, when I first started freelancing, payment was not really an issue. No, let me restate, payment was ALWAYS an issue, but I never really questioned that I would get paid, sooner or later. I puddled along, invoicing in my customary leisurely fashion, occasionally making a "When should I expect the cheque?" type of call.
Then came Dotcom I.
I know, pretty much anything that can be said about this time has been said, but I have a different take.
In the heat and the excitement of the dotcom craze, many companies anxious to lock in financing bent over backwards to present themselves as winners. To attract the attention of the capital markets, public and private, they did powerpoints, business plans, fact sheets, presentation folders, events, meetings, elevator pitches, mailings, strategic plans, websites....
In reality, outside suppliers provided the strategic and promotional material for many of these early-stage hopefuls. If the company wasn't successful, the supplier didn't get paid. These weren't the terms the supplier had signed up for, but it was often what happened if the company couldn't raise money. Many companies died in the dotcom-to-notcom process, leaving significant debts behind them.
For the entrepreneurs, dotflops could be chalked up to experience. And many people came back to try again, having pulled enough out of whatever wreckage they'd walked away from to do the phoenix thing. No hard feelings, at least not from the capital markets whose representatives had profited from selling new tech issues to over-excited investors.
For the suppliers, it was different. Several local communications firms went down under the burden of their unpaid invoices. The rest tightened their belts and drove on, significantly grumpy.
But something fundamental had changed.
More companies began to expect that suppliers would work for promises, or maybe take stock or options in exchange for services or products. And more managers seemed to think that it was okay to ask that work be done without necessarily having the means to pay at hand. The money would come, right? And if it didn't, there was nothing they could do.
Where once managers would have shorted on their own pay to ensure that their people got paid, the "pay yourself first" mantra had won out. Raising money became a no-fault game for the participants.
However, most of the consultants and suppliers I know have found they now have to chase payment more than they did 15 years ago. A handshake is no longer a reasonably certain guarantee of mutual contractual obligation. And invoices are sometimes regarded as slightly malleable, unfixed, ephemeral.
It's as if business took a step away from the concrete and entered a world less real, where the impact of debt and obligation is somehow less weighty. A bit like a move into virtual reality....
NEXT: How to get paid consistently.
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IRonsideIR Blog
Welcome to the IRonsideIR blog. Our goal here is to discuss the kinds of issues we deal with every day in investor relations, from financing to fiduciary responsibility. Well, actually, the range is more like A-Z, but I was liking the alliteration.
A good IR officer is really a gifted generalist with broad interests, ready (after the necessary research) to provide a considered opinion on anything that has the potential to affect a company's share price.
At IRonsideIR we are liberally equipped with opinions. Our goal, however, is to provide our clients with good IR, and to make our good advice even better through discussion of the issues. Hence this blog.
The IRonside IR practice focusses on small-to-mid-cap companies. They often bring us into debates on issues that have an impact on valuation, as their management is busy building the business. This is fun for us, as it means we get deeply involved in company strategy as well as communication. But it also means that we have a deeper responsibility for the IR program and how it is received by the Street.
A good IR officer is really a gifted generalist with broad interests, ready (after the necessary research) to provide a considered opinion on anything that has the potential to affect a company's share price.
At IRonsideIR we are liberally equipped with opinions. Our goal, however, is to provide our clients with good IR, and to make our good advice even better through discussion of the issues. Hence this blog.
The IRonside IR practice focusses on small-to-mid-cap companies. They often bring us into debates on issues that have an impact on valuation, as their management is busy building the business. This is fun for us, as it means we get deeply involved in company strategy as well as communication. But it also means that we have a deeper responsibility for the IR program and how it is received by the Street.