#theroadto10000 have we reached 100 yet?, page-178

Hey King Eddie,

I am lead to believe, one of the most restrictive elements to LIFX has been that the major shareholder ( eastfield 51% ) is not a well finance company. It is a private company that is now looking to expand by IPO in China. Now, lets say Amazon or best buy wants to place an order for 1m lights. Each of lights cost $10 to make and sell for $70. The manufacturer needs access to $10m to make those lights. There is a multi- month delay between building the lights and receiving payment. Quite often, the company would need to be ahead of the curve and hold inventory in anticipation of orders. ( NB though that the big guys do give a 26 week minimum forecast ). Eastfield would not be able to accept such an order for 1m lights.

So to answer your question, part of this LIFX deal involves Buddy accessing working capital in the form of a debt facility from the financial markets. The larger this is the more lights can be made and consequently sold. The debt providers, provide a facility whereby funds can be drawn upon and repaid throughout the year. They receive interest on these borrowing and will require collateral such as inventory.
This all takes time to have due Diligence done on and legals completed.

Thats my take on things, but as always DYOR .