3 ms·

> Seed funding isn't a loan, it's equity. Yes, hence the "almost". GP said that startups aren't given unsecured loans of $250k, and therefore it would be madn

> Seed funding isn't a loan, it's equity. Yes, hence the "almost". GP said that startups aren't given unsecured loans of $250k, and therefore it would be madness to give unsecured loans of that magnitude to individuals, so they can invest in a college education for themselves. ...except startups do get money of that magnitude that is essentially unsecured. If the startup folds, the investor loses the money, in the same way a borrower loses the money if the lender defaults. So if there's a way to get unsecured money to startups for risky ideas without the founders having to indebt themselves for eternity, there ought to be a way to do the same for individuals wanting a college education without indebting themselves for eternity. (And therefore GPs argument was wrong.)

wutbrodo 7y ago
> Yes, hence the "almost". You can't put "almost" on a false statement and make it true. Equity isn't "almost" a loan by any stretch of the imagination, just as going to a movie isn't "almost" "making an unsecured loan to a movie theater" (if you don't enjoy the movie, you still lose your money). > startups do get money of that magnitude that is essentially unsecured. If the startup folds, the investor loses the money, in the same way a borrower loses the money if the lender defaults. This is stretching the meaning of debt beyond all recognition (and accuracy). The ownership that comes with seed funding doesn't just involve giving them money like debt does. First off, you're entitled to a _proportion_ to their value/revenue in perpetuity, as opposed to a fixed principal+interest as with debt. Secondly, part-ownership of a company gives you rights to the company you own beyond a revenue stream: which is why seed funders have partial control over the companies that they partially own (eg sitting on boards). > So if there's a way to get unsecured money to startups for risky ideas without the founders having to indebt themselves for eternity, there ought to be a way to do the same for individuals wanting a college education without indebting themselves for eternity. As I said in my comment, equity financing for humans is in its infancy, and I've been in support of it for a long time. The comparison to seed funding, however, is ludicrous, since (as I said), rights in perpetuity to income streams are not on the table, and neither is the ability to (partially) make career decisions for the recipient of the funds. > (And therefore GPs argument was wrong.) Nope. (see above)

wutbrodo 7y ago

> Yes, hence the "almost". You can't put "almost" on a false statement and make it true. Equity isn't "almost" a loan by any stretch of the imagination, just as going to a movie isn't "almost" "making an unsecured loan to a movie theater" (if you don't enjoy the movie, you still lose your money). > startups do get money of that magnitude that is essentially unsecured. If the startup folds, the investor loses the money, in the same way a borrower loses the money if the lender defaults. This is stretching the meaning of debt beyond all recognition (and accuracy). The ownership that comes with seed funding doesn't just involve giving them money like debt does. First off, you're entitled to a _proportion_ to their value/revenue in perpetuity, as opposed to a fixed principal+interest as with debt. Secondly, part-ownership of a company gives you rights to the company you own beyond a revenue stream: which is why seed funders have partial control over the companies that they partially own (eg sitting on boards). > So if there's a way to get unsecured money to startups for risky ideas without the founders having to indebt themselves for eternity, there ought to be a way to do the same for individuals wanting a college education without indebting themselves for eternity. As I said in my comment, equity financing for humans is in its infancy, and I've been in support of it for a long time. The comparison to seed funding, however, is ludicrous, since (as I said), rights in perpetuity to income streams are not on the table, and neither is the ability to (partially) make career decisions for the recipient of the funds. > (And therefore GPs argument was wrong.) Nope. (see above)