Earnest Capital

“October of 2018, I published a draft term sheet of this put it on hacker news, put it everywhere, left the comments open in the Google docs and just got like a flood of people red teaming this thing like crazy.”

“We, for example, we don't ever, like, strive to have any kind of covenants or any kind of, you know, way that we could there's no deadline that you can miss for repayments, right? There's no way to default On us other than, you know, literally not paying, maki…”

“These kinds of set it and forget it, you know, value creating products. I just think they inherently have much lower churn. If it's a product that it's a, you know, project management tool that everyone on the team has to use daily and weekly and monthly. Just…”

“It varies, but you could say it's like three to four XR money, and then if you pay that back, you never pay us another bit of profit share ever.”

“The founders are allowed to make that payment. They're not allowed to prepay in the sense of just dumping money at us. So what they can't do is just say, here's a check, 300 grand, boom, like we bought you down, right? And again, the reason for that is let's s…”

“And so we do believe that, you know, over time this will continue to be categorized more and more as equity risk, which the tax code tends to reward with capital gains treatment.”

“We decided to make the fund a five Oh six C fund, which basically means we can talk about it publicly.”

“It's usually reducible by two thirds. So, so if we had written a check that entitled us to say nine percent of ConvertKit, you know, Nathan absolutely would have, you know, paid us down to about three percent and we would be very happy to still have that three…”

“What I will say is if you're talking about DPI, you're talking about actual cash dollars coming back to us. I think the majority of those cash dollars come from the exit events or at exit event, either the company sells, right? Or we at some point decide that …”

“Our, like, minimum investment, which is, we're, it's five K a quarter, so it's pretty low.”

“All of our mentors also have to be LPs in the fund, so they are actually, like, everybody is invested, literally, in the success of the founders on this mission”

“February of last year, we launched earnest fund one you know, candidly is really like a proof of concept fund. So it was about 3.1 million dollars that we invested over 18 months. So it was essentially One company a month for 18 months, and we are just hitting…”

“Some of it was my capital for sure, but we, I think we had about 40 total LPs. So yeah, so, you know, it was almost all just entrepreneurs. So we didn't have any, you know, anything really approximating institutional investors in there with the section of, I m…”

“So I don't want to go on the VC track. I'm more interested in investors like tiny seed or earnest capital, things like that.”

“It's less than a 100,000 dollars.”

“They invest, let's say they invest a 100,000 US dollars for, let's say six percent equity. And you know, you probably get a term to say in the next few years, if you generate revenue and you just return three X of the a 100,000 dollars, which is 3000 300,000 d…”