tylertringas

8 ms·

31.
by tylertringas 7y ago
Lots of reasons, although as i said in my post, unless it's a "strategic acquisition" at a huge multiple, it's usually not because "the math" of selling makes more sense than holding it. In my case, having the
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by tylertringas 7y ago
My two cents: It's a great idea if you find the perfect person but is very hard to go out and do . The compensation you need to provide to bring on someone to run the entire business, in terms of salary + ownership is often ends up wi
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by tylertringas 7y ago
This is an overview of the new tools and forms of capital enabling founders to build and fund businesses while still maintaining as much flexibility and optionality as possible.
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The Entrepreneur's new path of maximum optionality(medium.com)
2 points by tylertringas 7y ago|1 comments
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by tylertringas 7y ago
This might be useful: https://earnestcapital.com/shared-earnings-agreement/
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by tylertringas 7y ago
My framework is to just look at your metrics and ascribe certain metrics to the right areas of focus, if one metric is lagging/worse than the others, focus there. Not enough free trial signups? Switch focus to marketing. Good trial vol
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by tylertringas 7y ago
We are in the same ballpark but don't do revenue-based financing (ie getting repaid via taking a % of revenue). We are typically investing earlier in startups where it doesn't make sense to take money off the topline yet. (More on
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by tylertringas 8y ago
That is a tool for calculating the % of a sale that would go to Earnest depending on which year you sell the business in. It is set at year 6 in the default setting for the tool. Earnest's % of a sale goes down as Shared Earnings payme
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by tylertringas 8y ago
This thread is about Tinyseed so I won't hijack it with a defense of calling Earnest predatory (folks can read the terms, decide for themselves https://earnestcapital.com/shared-earnings-agreement-digging... ). Uncritic
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by tylertringas 8y ago
Cool. Hit me up. Let's see if we can work together to help founders. Excited to see lots of new models and help founders find the right fit.
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by tylertringas 8y ago
All the exact terms are negotiable. We make a spreadsheet available for any founder to run these numbers before doing a deal. Hyper committed to transparency and educating founders to make sure they know what they're getting into. I wi
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by tylertringas 8y ago
It's not debt. No interest rate, no repayment schedule, no recourse.
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by tylertringas 8y ago
Hey Glenn. I don't think there's anything wrong with VC per se, but it's no longer a fit for most software businesses (why the best firms are moving to crypto, robotics, AI, etc). We have an outdated association with softwa
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by tylertringas 8y ago
It's a fund. Our basic bet is that way fewer companies will fail than a traditional seed VC portfolio (tons of reasons but not forcing them to hit growth targets that they need to show to raise the next round is one). A portfolio of th
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by tylertringas 8y ago
Pre-orders are an awesome way to bootstrap a business.
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by tylertringas 8y ago
Cheers. I love this topic.
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by tylertringas 8y ago
I think it means we're on to something if we have folks in this thread arguing from boths sides that we're so founder friendly we'll never turn a profit AND that our terms are "predatory" and worse than a bank loan
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by tylertringas 8y ago
It's relatively easy to write terms that (a) allow something like this to adversely affect us if done on good faith over the normal course of business and (b) prevent founders from doing this maliciously to engineer more equity in the
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by tylertringas 8y ago
It's not set at 9.5%. Not sure where that number is coming from. Check out https://earnestcapital.com/shared-earnings-agreement-digging...
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by tylertringas 8y ago
Hiding? https://earnestcapital.com/shared-earnings-agreement-digging...
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by tylertringas 8y ago
The residual stake is a factor of the investment amount, the Valuation Cap (negotiated at time of investment) and the terms of a sale. Note by "stake" we just mean an option to participate in a sale. You can run the business profi
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by tylertringas 8y ago
https://earnestcapital.com/contact/
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by tylertringas 8y ago
No personal liability. We assume some of these investments will fail for us. % of the sale would be roughly $100k / Valuation Cap (which is negotiable at time of investment).
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by tylertringas 8y ago
We are mainly focused on the early stage when a business loan (ie no personal gaurantee) isn't an option. I went the route you described (racking up $50k credit card debt) to launch my SaaS business and it sucked. That said a business
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by tylertringas 8y ago
Once Return Cap is fully repaid the founder can run the business profitably forever and not pay us anything more. We do typically prefer an option for a % only if the business is sold but can do a deal (with a higher Return Cap) that exclud
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by tylertringas 8y ago
10-12 per year. There's no limit. If the business stalls at $3k MRR (ie no Founder Earnings) it can go on running forever or shut it down. We would get a % if it was ever sold.
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by tylertringas 8y ago
Definitely.
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by tylertringas 8y ago
We also have a residual, uncapped, % option if the founder ever sells the business. This keeps us aligned with the founders to keep helping them grow the value of the business for the long-term even after the Return Cap is paid back. >
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by tylertringas 8y ago
I like Jerry's work a lot but come to a different conclusion. My basic thesis is that we're in the deployment age of the internet/web/mobile era and there is a whole new wave of a lot lower risk and a bit less reward opp
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by tylertringas 8y ago
Good question! Small team for now. Me: https://twitter.com/tylertringas Head of Platform: https://twitter.com/bentossell Amazing group of mentors: https://earnestcapital.com/earnest-mentorsh

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