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It's not really the same as a loan - you don't pay it back with cash, it's paid for upfront with a chunk of equity (usually). And if the company fails, the inve
by dandelany 5y ago
It's not really the same as a loan - you don't pay it back with cash, it's paid for upfront with a chunk of equity (usually). And if the company fails, the investors take a bath & you aren't personally liable for it. Not fun but it happens all the time.
Why is it celebrated? Because A) the company suddenly has more capital in their bank account to grow the business and B) they have someone with connections and power who has a vested interest in the business succeeding, both of which improve the long-term likelihood of success/profit (in theory at least).
PS: many people do celebrate and post about it when they get a home loan, it's an exciting thing! Debt is a tool, it's not inherently shameful.
- crate_barre 5y agoI think it’ll be widowed down in prestige like all things. Graduating high school, who cares. Getting a loan to goto college, and graduating - guess what, who cares? The more unsubstantial ideas getting millions and petering out, over time, will create the ‘who cares?’ effect. Saturation is the mother of all mediocrity. On the other hand, systems, which inevitably become entrenched, are built on saturation. It becomes a mediocre way of life.