3 ms·

Sounds interesting enough, as a bootstrapper who previously raised funds and hated the experience, I like this idea, but I guess the devil is in the details. I

Sounds interesting enough, as a bootstrapper who previously raised funds and hated the experience, I like this idea, but I guess the devil is in the details. I don't give a shit about the VC conversion stuff and as another commenter has said, this could just be a sly way to slip into regular style deals with all that upside, but at the same time, if I just need money to focus and I know how much and when I have to pay out, it's just basically a specialty loan, which seems intriguing. Not sure what happens if your business fails in this case however, I assume it'd be treated like a regular investment and they can't go after you personally as in a real loan, so the onus is on the investor to make sure they do their homework. It seems fair to say if I take $100k I pay you back say 4x that, no other strings attached. We both get value out of it. Who wouldn't want to 4x their money with some careful investment? Seems like it could be more reliable then regular startup investing, albeit slower and less exciting, but at the same time, you get to actually enjoy helping people like you instead of trying to help them but also trying to fuck them because it's your job.

charlesdm 8y ago
Everyone would want to 4x their money with some careful investment. However, who is willing to give up 4x that amount on a proper working business with some traction? I'd assume they're not going to give these "loans" to high risk "hey I have a cool idea" businesses, but more to businesses where it's clear that investing $x adds $x * 3 revenue. Meaning the risk you're taking is likely not extremely high, more on the same level to private equity. Those are massive returns for the investors. The only people willing to take money under these terms are really desperate.
- weliketocode 8y ago
  Your point is valid but somewhat exaggerated. There should be some companies somewhat in the middle of the two extremes you've laid out. Companies that are reaching product market fit but still have a high level of uncertainty. Note, I'm not saying this structure will necessarily see huge demand. But I also don't believe the terms are completely out of reason.
  - tylertringas 8y ago
    Exactly. Like all forms of investment, it's not for every founder, every business at every stage. Our canonical example is a technical founder who has a full-time job or full-time consulting, built a product on the side with ~$3k MRR, a great potential a company and is faced with (1) go full-time now and eat through lots of savings to get it off the ground or (2) work on it nights and weekend for 18 months. Our proposition here is to provide capital and resources to compress 18 months of nights & weekends into 6 months of full-time work to get the company off the ground.

charlesdm 8y ago

Everyone would want to 4x their money with some careful investment. However, who is willing to give up 4x that amount on a proper working business with some traction? I'd assume they're not going to give these "loans" to high risk "hey I have a cool idea" businesses, but more to businesses where it's clear that investing $x adds $x * 3 revenue. Meaning the risk you're taking is likely not extremely high, more on the same level to private equity. Those are massive returns for the investors. The only people willing to take money under these terms are really desperate.

weliketocode 8y ago
Your point is valid but somewhat exaggerated. There should be some companies somewhat in the middle of the two extremes you've laid out. Companies that are reaching product market fit but still have a high level of uncertainty. Note, I'm not saying this structure will necessarily see huge demand. But I also don't believe the terms are completely out of reason.
- tylertringas 8y ago
  Exactly. Like all forms of investment, it's not for every founder, every business at every stage. Our canonical example is a technical founder who has a full-time job or full-time consulting, built a product on the side with ~$3k MRR, a great potential a company and is faced with (1) go full-time now and eat through lots of savings to get it off the ground or (2) work on it nights and weekend for 18 months. Our proposition here is to provide capital and resources to compress 18 months of nights & weekends into 6 months of full-time work to get the company off the ground.