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Yep. It's pretty incredible. Good thing startup founders are usually a little bit better at math. Seems like it'd be about like this: "Advance" your sta

Yep. It's pretty incredible. Good thing startup founders are usually a little bit better at math. Seems like it'd be about like this: "Advance" your startup $1M (really, advanced to yourself, since you're hanging onto the money) Sell the startup dubious services at outrageous prices, force them to make your dumb cousin an SVP "Pay back" the loan with %10 of the *profits* When the profits top $10M, the founders *start* seeing 10% of what comes in (after expenses, of course) I'm in the wrong line of work. edit: As I read this, I'm realizing that there probably are termsheets out there that aren't far off from this.

rbanffy 17y ago
I wonder if there is a band leader that writes a decent business plan, puts on a suit and goes to an investment bank seeking funds. With a decent enough BP, I doubt a suit is needed.
- vidarh 17y ago
  Re: music industry, banks and suits, there's the old story about Branson and Virgin back when they were just a label. No idea if it's just an urban legend or if it really happened. The story says that Virgin was practically bankrupt, and that Branson went to their bank - a very stodgy, conservative British bank - and on purpose avoided wearing a suit contrary to all advice. He apparently got there dressed in his normal casual clothes, sat down and asked for huge increase in their credit facility without any plans or anything to back it up other than some vague claims about needing money to expand. The thought was supposedly that if someone in his business showed up to the bank in a suit with a detailed plan for "how to save the business" they'd smell the desperation and get rid of him as quick as they could, so instead he went looking like it was any other day and it really didn't matter to him if they said yes and no, but hey, it wouldn't hurt with another half a mill to grow a bit faster, hoping that they'd figure that business had to be great if he was that casual about those kind of amounts. Not that I'm advocating that approach in general..
- xsmasher 17y ago
  Possible, but the bank would probably prefer to invest in the record label, and get a piece of their lower-risk action, than invest in a single band.

rbanffy 17y ago

I wonder if there is a band leader that writes a decent business plan, puts on a suit and goes to an investment bank seeking funds. With a decent enough BP, I doubt a suit is needed.

vidarh 17y ago
Re: music industry, banks and suits, there's the old story about Branson and Virgin back when they were just a label. No idea if it's just an urban legend or if it really happened. The story says that Virgin was practically bankrupt, and that Branson went to their bank - a very stodgy, conservative British bank - and on purpose avoided wearing a suit contrary to all advice. He apparently got there dressed in his normal casual clothes, sat down and asked for huge increase in their credit facility without any plans or anything to back it up other than some vague claims about needing money to expand. The thought was supposedly that if someone in his business showed up to the bank in a suit with a detailed plan for "how to save the business" they'd smell the desperation and get rid of him as quick as they could, so instead he went looking like it was any other day and it really didn't matter to him if they said yes and no, but hey, it wouldn't hurt with another half a mill to grow a bit faster, hoping that they'd figure that business had to be great if he was that casual about those kind of amounts. Not that I'm advocating that approach in general..
xsmasher 17y ago
Possible, but the bank would probably prefer to invest in the record label, and get a piece of their lower-risk action, than invest in a single band.