Re:Goodbye ICOs, hello ILPs?
by CryptoPunk on Thursday April 12, 2018 @09:33PM
(#16826471)
>>That sounds more like equity to me than a loan.
It sounds like the principal and interest paid back is a fixed and predetermined value, rather than proportional to the company's revenue, which would make it a loan.
The innovation here I believe is conditioning repayment obligations on the company having sufficient revenue.
So in a sense it's like a loan contract with a clause allowing you to get a repayment holiday when your business is not earning enough.
This, like all loans, has much less upside potential than equity.
It sounds like the principal and interest paid back is a fixed and predetermined value, rather than proportional to the company's revenue, which would make it a loan.
The innovation here I believe is conditioning repayment obligations on the company having sufficient revenue.
So in a sense it's like a loan contract with a clause allowing you to get a repayment holiday when your business is not earning enough.
This, like all loans, has much less upside potential than equity.