tylertringas

11 ms·

61.
by tylertringas 8y ago
Don't think we have the legal infrastructure to invest in Indian companies right now, but definitely could invest in a company that used Stripe Atlas to form a US entity: https://stripe.com/atlas
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by tylertringas 8y ago
> Are you planning to tune that over time? Yes, very much consider this our next product. Will build, measure, learn, iterate as we go. > I used a portfolio loan to buy a business to run as a side project It's a useful comparison
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by tylertringas 8y ago
Uh huh. https://earnestcapital.com/request-for-startups-1-remote/
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by tylertringas 8y ago
$3m?! No. This post walks through each of the terms in detail: https://earnestcapital.com/shared-earnings-agreement-digging... We have a Return Cap which is negotiated on a per deal basis but we guide toward 3-5x the initia
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by tylertringas 8y ago
We're more of a substitute for seed equity. Or at least that's the lens through which we have structured our terms and strategy. Most of the co's we are looking at would not be able to get a small business loan (zero collater
66.
by tylertringas 8y ago
Founders should def consider all their options. It's very much not a loan though. There is no repayment schedule (we get paid as the founders generate Founder Earnings) and there's no personal guarantee. On average I think it&#x27
67.
by tylertringas 8y ago
At the risk of not answering the question, I'd say no form of capital is "better" than any other. Capital is a tool and the job of the founder is to find the option (both on payments term and other aspects like mentorship or
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by tylertringas 8y ago
I like them a lot and don't see any problem with us investing via a SEAL in a B-Corp.
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by tylertringas 8y ago
The thing is, this category of "not VC" is actually like 99% of all businesses. There's going to be a ton of diversity of viewpoints and alignment and I think it's good lots of folks are trying out different models. Not
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by tylertringas 8y ago
Thanks! Yep, fun times.
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by tylertringas 8y ago
> As a niche market founder wish option like Earnest existed when we were raising early financing. Can't tell you how often I hear this. > what dynamics are like for LPs Can't really say much on this because SEC. But yes, be
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by tylertringas 8y ago
Not really either of those. A closer version would be profit-share + a SAFE. The primary function is for us to share in the profit (or more specifically "founder earnings") of the business alongside the founder(s). If you sell t
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by tylertringas 8y ago
Yes, by default we don't take equity (shares, board seat, none of that). If you decide to raise a round of equity financing (ie VC) we could convert into equity alongside them and if you sell the company we get a % of that. There'
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by tylertringas 8y ago
Specific to the funding model, we both do a kind of profit-share, with the main difference being that Earnest's repayment will usually happen earlier (assuming the business is successful) but is capped, Tinyseed payments would be small
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by tylertringas 8y ago
Well, yes in some cases. Our goal is definitely for founders to get to personal break-even, where they can pay themselves enough to work on the business full-time, by the time our investment runs out. Some percentage of these will fail (sta
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by tylertringas 8y ago
Thank you! Yep, check https://earnestcapital.com/faq/ and let me know if anything needs to be added?
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by tylertringas 8y ago
Yes, my goal (with transparency etc) is for there to be dozens of firms in this space. Confident it will happen. Thanks!
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by tylertringas 8y ago
Hello HN - I'm Tyler the founder of Earnest Capital. We officially went live today and I'm here for questions, comments, criticisms, whatever really.
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Earnest Capital is live(earnestcapital.com)
368 points by tylertringas 8y ago|144 comments
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Request for Startups: Remote tools for remote teams(earnestcapital.com)
2 points by tylertringas 8y ago|0 comments
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by tylertringas 8y ago
If you find these critiques of VC are resonating but also feel like a bit of capital, a mentorship group, and shared resources would help you build a sustainable profitable business, then I'd love any questions or comments on our Share
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Earnest Capital Shared Earnings Agreement: Digging into the Numbers(earnestcapital.com)
2 points by tylertringas 8y ago|0 comments
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by tylertringas 8y ago
The section on "Cost of SEAL Capital, in Equity" is mathematically correct, but omits a few key points that make the example unreflective of what would happen in reality. The whole point of the Equity Conversion terms is to keep o
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by tylertringas 8y ago
Hi all, I'm the GP of Earnest Capital and I'll add here the comments I gave to Matt privately before this post. The terms we use for our Shared Earnings Agreement are the result of a transparent and honest discussion with the comm
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by tylertringas 8y ago
Exactly. In this structure, founder can pay themselves whatever salary they want but any amount above an agreed cap is added into Founder Earnings and subject to dividend sharing.
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by tylertringas 8y ago
Our structure is 100% aligned with the founder. If they founder(s) take profits, we get a share of that. If it makes more sense to reinvest profits or if there currently aren't profits, we don't get paid and we do our best to help
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by tylertringas 8y ago
Fair point.
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by tylertringas 8y ago
Exactly. Like all forms of investment, it's not for every founder, every business at every stage. Our canonical example is a technical founder who has a full-time job or full-time consulting, built a product on the side with ~$3k MRR,
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by tylertringas 8y ago
1. Good point. This is just some boilerplate from fundraising docs that basically means the legal costs of closing the deal are paid out of the investment money (not the founder's pocket). But could be clearer / we could drop it.
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by tylertringas 8y ago
It's definitely easier to get a $1m bank loan to open an Arby's franchise than $100k loan to build a SaaS startup.

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