4 ms·
At the risk of not answering the question, I'd say no form of capital is "better" than any other. Capital is a tool and the job of the founder is to find the op
by tylertringas 8y ago
At the risk of not answering the question, I'd say no form of capital is "better" than any other. Capital is a tool and the job of the founder is to find the option (both on payments term and other aspects like mentorship or personal exposure) that best aligns with their goals.
- a13n 8y agoHey Tyler, thanks for responding. Sure, I mean different forms of capital are better in different circumstances. So in which circumstances is the form of capital you're offering better than a 20-30% APR business loan? Asking as a profitable bootstrapped SaaS founder.
- axlemax 8y agoTwo possible answers 1. When the business is too early stage to get a bank loan 2. When the business is highly risky and the founder doesn’t want the debt burden (not sure if Earnest would fund this either)
- tylertringas 8y agoWe are mainly focused on the early stage when a business loan (ie no personal gaurantee) isn't an option. I went the route you described (racking up $50k credit card debt) to launch my SaaS business and it sucked. That said a business loan could be a great option for more mature businesses with solid cash flow (hopefully at much less than 20-30%!)