Disclosure
Tringas: Earnest Capital blocks arbitrary prepayments but guarantees formulaic buy-downs
“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…”
Prediction Not checkable as stated
Tringas: New software deployment age favors niche products over mega-companies
“It's not the case that You know, a handful of software companies are going to scoop up all of the opportunity. What we're seeing and something that I've written about is, is this new deployment age of software.”
Insight
Tringas: VC feedback is mostly optimized to make founders go away
“Don't ever listen to the feedback that VCs give you. It's mostly optimized for you to just leave them alone and refer other people to them. It's not real advice. Like mostly don't take it.”
Insight
Tringas: Traditional convertible notes and SAFEs fail profitable, non-fundraising startups
“Most of the early stage instruments, convertible notes and safes really are orientated around the idea that you will raise another round. And if you don't raise another round, They either do stuff that's, you know, not great, like accumulate interest indefinit…”
Disclosure
Tringas: Earnest Capital equity is typically reducible by up to two-thirds
“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…”
Prediction Open · timeframe Jul 2025
Tringas: Shared earnings instruments will eventually qualify for capital gains treatment
“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.”
Insight
Tringas: The modern American dream is running a remote, profitable software business
“The general idea of the American dream, right, the being successful, the white picket fence, all that sort of, like, just baseline level of success that many people aspire to, I think is really converging around the idea of running a, you know, profitable, rem…”
Insight
Tringas: 'Set it and forget it' software products have inherently lower churn
“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…”
Insight
Tringas: Onboarding Is Paramount for Passive SaaS Products With High LTV
“That's why the relentless focus on sort of onboarding is so important with these kinds of products is that like, once you get someone there, you're good. You know, I mean, the lifetime value just because of the absurdly low churn is just astronomical because i…”
Prediction Not checkable as stated
Tringas: Earnest Capital's cash returns will primarily come from exits, not dividends
“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 …”
Disclosure
Tringas: All Earnest Capital Mentors Must Invest as LPs in the Fund
“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”
Disclosure
Tringas: Earnest Capital raises under Rule 506(c) for public solicitation
“We decided to make the fund a five Oh six C fund, which basically means we can talk about it publicly.”
Disclosure
Tringas: Earnest Capital sets LP minimum at $5,000 per quarter
“Our, like, minimum investment, which is, we're, it's five K a quarter, so it's pretty low.”
Disclosure
Tringas: Earnest Capital Fund 1 raised $3.1M and backed 16 companies
“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…”
Assertion Contradicted
Tringas: StoreMapper was the first store locator app on Shopify
“When we launched store locator app, it was the first one, you know, in there. So we just got a hundred percent of the sort of traffic from that.”
Disclosure
Tringas: Earnest Capital Fund 1 had about 40 LPs and no institutions
“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…”
Disclosure
Tringas: Earnest Capital caps shared earnings payback at 3x to 4x
“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.”
Disclosure
Tringas: Earnest Capital SEALs have no covenants, repayment deadlines, or foreclosure rights
“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…”
Disclosure
Tringas: SolarList pitched around 400 VCs to raise capital
“We were pitching probably 400 VCs, basically.”
Assertion Supported
Tringas: Earnest Capital open-sourced its draft term sheet in October 2018
“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.”
