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Banks will loan you at most 10% of your last 12 months revenue for an uncollateralized loan. Not in the same world as VCs. And "just" do an IPO, wow.
by cm2012 4y ago
Banks will loan you at most 10% of your last 12 months revenue for an uncollateralized loan. Not in the same world as VCs. And "just" do an IPO, wow.
- Guest42 4y agoAmazon did it and look at where they are today. They weren't even profitable. What's the problem? /s
- 2Gkashmiri 4y agoin india, banks give you working capital loan with floating charge on your stock/debtors at like 25% of your previous FY turnover... you could theoretically take up more loan but the interest would negate any "earning" considering the banks charge like 10-15% interest on the amount so if your turnover is 10 million rupees, you could get 2.5 Mil loan but the interest on it would be 325k inr which i am sure not many businesses can sustain normally.
- cco 4y agoWhile that does represent some modest drag on your business, in this hypothetical you have very good foundations and you could outperform that 10% interest without too much trouble. To wit in this scenario you're a software company, not a restaurant, you should scale far more easily than brick and mortar. And 10% interest to preserve your cap table and board?
- nixgeek 4y agoWhat GP is saying is you can only get a note of 10% size of your trailing 12 months revenue, this is quite different to 10% APR.