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How to get a 28.9% risk-free after-tax return: Looking at Debt repayment as an Investment.
- charlesju 18y agoKind of off topic, but I'll give it a shot. Yeah, I think that paying off your debt is a smart thing to do. Likewise, I think debt is a great leverage tool if you can shelter yourself with some sort of limited liability company (c-corp, LLC, etc). At that point, there truly is very little risk with your personal assets, and all the benefits of leveraging the debt. (Unless you're being abusive with the limited liability, then you'll probably get pierced) And now how this relates back to Hacker News and startups in general is that I think there should be further exploration into using debt instead of funding to grow a company. If your startup is making money and is seeking funding only to grow, perhaps you should look into debt. Especially after sealing a series A, I think most banks are very eager to sign on with agreeable interest rates. As startups either grow exponentially or burn out and die, this maximizes returns by refusing to dilute your stock with VC funding and still having the proper capital leverage to get to your next milestone. What do you guys think about debt funding?