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These loans aren't taken out to cover costs but to fund investment in new lines of business, or a 10-100x expansion of an existing one. Since nobody in your in
by dilemma 10y ago
These loans aren't taken out to cover costs but to fund investment in new lines of business, or a 10-100x expansion of an existing one.
Since nobody in your industry buys millions of dollars worth of servers, you should consider doing it. You could create a new market which you own, or elevate yourself from someone who rents capacity to the company renting it out. It could be the business opportunity of your life.
- thrkw123456789 10y agoIs this sarcastic? Borrowing millions of dollars at 20-30% to compete with some cash rich companies who already dominate the market seems crazy - (borrowing at 5% could be another matter).
- wpietri 10y agoDepends on your target audience. I wouldn't want to compete with Amazon as a general proposition. But there may be some specific niche that isn't well served by Amazon. For example, there could be some piece of Tarsnap's infrastructure that is irritating/expensive to create but that other companies want to use. Note, for example, that Dropbox gets "substantial economic value" from running their own hardware. [1] And Tarsnap is in the position to offer a backup-specific white label service that other entrepreneurs might rather pay to use than rebuild. [1] http://www.wired.com/2016/03/epic-story-dropboxs-exodus-amazon-cloud-empire/ http://www.wired.com/2016/03/epic-story-dropboxs-exodus-amaz...
- JDDunn9 10y agoWho said 30% interest rate? If banks are lending at 6%, than a 30% higher interest rate would be 7.8%.
- rlucas 10y agoHmm, maybe you mean 2x-10x expansion. The world of 10x-100x expansion is the world of venture capital. The specialty lending world of Lighter Capital is about attractive, not explosive, growth -- but at much lower risk of total failure for both entrepreneur and investor.
- dilemma 10y agoYou're right, 2-10x is a more realistic number!