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But it is a loan; you get funds up front, with an agreement of payment later. In a broad sense that is the very definition of a loan. The problem here is the a

But it is a loan; you get funds up front, with an agreement of payment later. In a broad sense that is the very definition of a loan. The problem here is the agreement is uncapped, leading to things like a preference for additional profits over additional productivity.

Jensson 3y ago
> But it is a loan; you get funds up front, with an agreement of payment later. In a broad sense that is the very definition of a loan. No, you don't promise to pay anything back, you promise to give them a share of the profits, no profits means you don't have to pay anything. When you take a loan you promise to pay it back, profit sharing doesn't come with such a promise. > The problem here is the agreement is uncapped, leading to things like a preference for additional profits over additional productivity. It is uncapped because otherwise nobody would give you any money. If you want peoples money you need to give them a good reason to give it to you, and sharing a fraction of the profits you make is the only thing you can give them to make it worth it to them to give you money. If you have a very stable business idea with no risks, then some people would be willing to give you a loan. But that doesn't cover most startups. Instead you have to sell a share of your profits.
- deleted 3y ago
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- redcobra762 3y ago
  Firstly, you just keep describing a loan and then demanding it’s not a loan. A distinction without a difference. Secondly, people take out loans all the time for small businesses. Thirdly, whatever you want to call it is not a boolean endeavor; investment wouldn’t drop to zero if a limit to profits were introduced, it would drop proportionately to the cap. The question was how to spur productivity growth, and I think an answer involves looking at the conflicting nature of profit motives. I don’t know what the answer is, but I think looking there will be more fruitful than blaming technology, based on my limited exposure to classical economics.
  - Jensson 3y ago
    > Firstly, you just keep describing a loan and then demanding it’s not a loan Selling a part of your future profits is not a loan. That is your made up definition. It is impossible to discuss with you if you change the meaning of words like this to suit your own views.
    - redcobra762 3y ago
      Sorry mate, have a good day!

Jensson 3y ago

> But it is a loan; you get funds up front, with an agreement of payment later. In a broad sense that is the very definition of a loan. No, you don't promise to pay anything back, you promise to give them a share of the profits, no profits means you don't have to pay anything. When you take a loan you promise to pay it back, profit sharing doesn't come with such a promise. > The problem here is the agreement is uncapped, leading to things like a preference for additional profits over additional productivity. It is uncapped because otherwise nobody would give you any money. If you want peoples money you need to give them a good reason to give it to you, and sharing a fraction of the profits you make is the only thing you can give them to make it worth it to them to give you money. If you have a very stable business idea with no risks, then some people would be willing to give you a loan. But that doesn't cover most startups. Instead you have to sell a share of your profits.

deleted 3y ago
[deleted]
redcobra762 3y ago
Firstly, you just keep describing a loan and then demanding it’s not a loan. A distinction without a difference. Secondly, people take out loans all the time for small businesses. Thirdly, whatever you want to call it is not a boolean endeavor; investment wouldn’t drop to zero if a limit to profits were introduced, it would drop proportionately to the cap. The question was how to spur productivity growth, and I think an answer involves looking at the conflicting nature of profit motives. I don’t know what the answer is, but I think looking there will be more fruitful than blaming technology, based on my limited exposure to classical economics.
- Jensson 3y ago
  > Firstly, you just keep describing a loan and then demanding it’s not a loan Selling a part of your future profits is not a loan. That is your made up definition. It is impossible to discuss with you if you change the meaning of words like this to suit your own views.
  - redcobra762 3y ago
    Sorry mate, have a good day!