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That's all part of the experiment. Given the only forcing function for distributions is tied to founder salary, there is no reason founders couldn't simply kee
by bryc3 12y ago
That's all part of the experiment.
Given the only forcing function for distributions is tied to founder salary, there is no reason founders couldn't simply keep investing in, and growing their business, for years without ever making a distribution. And we'd be thrilled for that as an outcome.
- prbuckley 12y agoCan you give more details on how distributions are tied to founder salary? If salary is above X distributions to indie.vc need to be Y.
- bryc3 12y agoLet's try this an example. Say at the time of funding founders are paying themselves $100k salaries each. They can pay themselves up to $150k each (150% salary at time of funding or a market salary we establish with them at the time of funding if they're paying themselves way below market). If they chose to start taking out more cash than $150k, that would be considered a distribution and the 80/20 would kick in until 2x our investment is returned. Then it flips to 20/80 until 5x is returned. Once 5x is returned there are no further distributions. That said, they can continue to draw their $150k salary and reinvest in the business as long as they'd like without ever paying out a distribution.
- jhartmann 12y agoBryce, This seems very interesting. I have been working on a Neural Network SaaS startup for awhile now, and I think my plans could align with this program. I just wanted to say thanks to you and OATV for trying this experiment. I think traditional VC's miss out on lots of opportunities where there is some consulting revenue early on in the company lifecycle to help build the business. I have high hopes that INDIC.vc and programs like it could help those sorts of businesses get going.
- bryc3 12y agothanks for the encouraging words.