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A few Internet buddies of mine did affiliate marketing, which has roughly similar cashflow issues. If you need to charge $100k in a day, and you can demonstrat

by patio11 12y ago

A few Internet buddies of mine did affiliate marketing, which has roughly similar cashflow issues. If you need to charge $100k in a day, and you can demonstrate capability to pay $100k in a day, Amex will happily accommodate your business. The main question is whether you can scrape together $100k~200k for your first 48 hours. I don't know what to say about that other than "It's clearly doable." (Anecdata: My personal credit limits total about $100k and have since BCC was my main source of income. That's the "No phone calls required" number for what a young professional with a fairly modest income and good credit habits can have just lying around. Do I have difficulty thinking that a team in Silicon Valley can float $X00k for N days? Not in the least.)

downandout 12y ago
>A few Internet buddies of mine did affiliate marketing, which has similar cashflow dynamics to this. If you need to charge $100k in a day, and you can demonstrate capability to pay $100k in a day, Amex will happily accommodate your business. Possibly, but I don't think that consists of calling Amex and telling the phone rep to log into your Stripe account to check out your mind blowing pending balance. Anyway all I was saying is that this was a weekend project of a YC company that had already (presumably) burnt through a good portion of their cash on their initial idea. You are right though, if you're a YC company, there are people you can call to deal with cash flow issues.
- patio11 12y ago
  I would suggest that anyone who wants to run a business approach this and other issues with a mindset of "This is a problem which I can trivially solve." rather than "This is a problem which would be trivially solved for me if I were member of a special elect, but given that I'm not, boo hoo." Chase bank didn't give me a $25k credit line because they're uber impressed with my HN karma. That's basically their get-you-in-the-door offer if you have good credit. Amex has floors of people who do underwriting and convincing them to let you give them money is by far not the hardest sale required of a startup founder. (An early tactic to try: "Would you accept written confirmation from our accountant that we added $100k in accounts receivable in the last 24 hours and will probably add $100k in AR in the next 24 hours if we can get a credit limit increase from you? I can have him fax it to you on letterhead. This is time-sensitive and while I'd greatly prefer to work with Amex you are not the only bank with a fax machine.") Stripe is full of friendly and accessible people, and should you be cursed with $100k of transactions on launch day (oh noes!), you have options including "Use the HN search function to find the CEO's email address and ask him for help, which he'll happily give you, because it makes his company very happy when non-fraudulent operations rack up $100k of transactions in a day. If he had a magic wand that could conjure up businesses like that he'd do virtually nothing other than wave it."
  - downandout 12y ago
    I was merely making a statement of fact - that if you are in YC, and you have a cash flow problem and receivables, odds are very good that someone will wire you some money or cough up a credit card that actually is good for millions of dollars. That isn't necessarily the case for everyone everywhere. Many businesses die because they don't have access to the capital to fulfill orders.

by patio11 12y ago

downandout 12y ago

>A few Internet buddies of mine did affiliate marketing, which has similar cashflow dynamics to this. If you need to charge $100k in a day, and you can demonstrate capability to pay $100k in a day, Amex will happily accommodate your business. Possibly, but I don't think that consists of calling Amex and telling the phone rep to log into your Stripe account to check out your mind blowing pending balance. Anyway all I was saying is that this was a weekend project of a YC company that had already (presumably) burnt through a good portion of their cash on their initial idea. You are right though, if you're a YC company, there are people you can call to deal with cash flow issues.

patio11 12y ago
I would suggest that anyone who wants to run a business approach this and other issues with a mindset of "This is a problem which I can trivially solve." rather than "This is a problem which would be trivially solved for me if I were member of a special elect, but given that I'm not, boo hoo." Chase bank didn't give me a $25k credit line because they're uber impressed with my HN karma. That's basically their get-you-in-the-door offer if you have good credit. Amex has floors of people who do underwriting and convincing them to let you give them money is by far not the hardest sale required of a startup founder. (An early tactic to try: "Would you accept written confirmation from our accountant that we added $100k in accounts receivable in the last 24 hours and will probably add $100k in AR in the next 24 hours if we can get a credit limit increase from you? I can have him fax it to you on letterhead. This is time-sensitive and while I'd greatly prefer to work with Amex you are not the only bank with a fax machine.") Stripe is full of friendly and accessible people, and should you be cursed with $100k of transactions on launch day (oh noes!), you have options including "Use the HN search function to find the CEO's email address and ask him for help, which he'll happily give you, because it makes his company very happy when non-fraudulent operations rack up $100k of transactions in a day. If he had a magic wand that could conjure up businesses like that he'd do virtually nothing other than wave it."
- downandout 12y ago
  I was merely making a statement of fact - that if you are in YC, and you have a cash flow problem and receivables, odds are very good that someone will wire you some money or cough up a credit card that actually is good for millions of dollars. That isn't necessarily the case for everyone everywhere. Many businesses die because they don't have access to the capital to fulfill orders.