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You don't pay investments back. They are a purchase of shares. The exchange is made and you're done. > How is possibly better than organic growth at this point

You don't pay investments back. They are a purchase of shares. The exchange is made and you're done. > How is possibly better than organic growth at this point where they are probably close to market saturation (in the sense that further exponential growth is implausible)? Moving into new markets, expanding the scope of the existing market, etc. Is OnlyFans that different from Youtube, or Patreon? Is it that different from GoFundMe? There are plenty of adjacent markets that OF could be trying to tackle.

rowland66 5y ago
> You don't pay investments back. They are a purchase of shares. The exchange is made and you're done. This is a common misunderstanding that equity funding is free. For the owner of a business, taking outside investment and issuing share in return is diluting the original owners stake in the business. If effect, you are paying for these investments forever because you are giving up some portion of the businesses future profits. There are certainly situations where this makes sense if you are able to grow much faster with the additional capital. However, the investment is not free.
- adventured 5y ago
  That's correct, taking venture capital is almost always a massive obligation and a very real operational liability. It's just not a liability in the financial loan/debt sense, the liability isn't on the balance sheet as debt, it's in the obligation and complexities that come with managing the new capital partners and their self-interest; self-interest which may not always align with your own or the company's best interests. The operational liability is burrowed into the cap table.
- staticassertion 5y ago
  I'm a CEO, I'm pretty familiar with the costs. I didn't say it was free, I very clearly said the opposite - that it is a purchase. The parent was very clearly (and admittedly, elsewhere) thinking of investments as a literal loan.

rowland66 5y ago

> You don't pay investments back. They are a purchase of shares. The exchange is made and you're done. This is a common misunderstanding that equity funding is free. For the owner of a business, taking outside investment and issuing share in return is diluting the original owners stake in the business. If effect, you are paying for these investments forever because you are giving up some portion of the businesses future profits. There are certainly situations where this makes sense if you are able to grow much faster with the additional capital. However, the investment is not free.

adventured 5y ago
That's correct, taking venture capital is almost always a massive obligation and a very real operational liability. It's just not a liability in the financial loan/debt sense, the liability isn't on the balance sheet as debt, it's in the obligation and complexities that come with managing the new capital partners and their self-interest; self-interest which may not always align with your own or the company's best interests. The operational liability is burrowed into the cap table.
staticassertion 5y ago
I'm a CEO, I'm pretty familiar with the costs. I didn't say it was free, I very clearly said the opposite - that it is a purchase. The parent was very clearly (and admittedly, elsewhere) thinking of investments as a literal loan.