Re:Earnest Capital is live
by tylertringas on Wednesday February 13, 2019 @01:21PM
(#19155273)
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 personal exposure) that best aligns with their goals.
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Hey Tyler, thanks for responding.
Sure, I mean different forms of capital are better in different circumstances. So in which circumstances is the form of capital you're offering better than a 20-30% APR business loan?
Asking as a profitable bootstrapped SaaS founder.
Re:Earnest Capital is live
by tylertringas on Wednesday February 13, 2019 @06:13PM
(#19158076)
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 loan could be a great option for more mature businesses with solid cash flow (hopefully at much less than 20-30%!)
Two possible answers
1. When the business is too early stage to get a bank loan
2. When the business is highly risky and the founder doesn’t want the debt burden (not sure if Earnest would fund this either)