| Love what you're trying to achieve here. My main worry is how you can do this at a non-net-negative return for your fund while also not coming across as predatory to the people you're trying to help. > We often talk about ‘bootstrapping’ but very few founders actually build a business with literally no outside capital, savings, or help. In our personal experience, from asking lots of founders in private, a large portion used their own accumulated savings from a high paying job, had a spouse that covered the bills, had a windfall or inheritance, or relied on loans and help from family members. Every one of these is systematically harder in some way for founders of color, female founders, LGBTQ founders, and founders from underprivileged geographies. Note, none of these are insurmountable and we all know folks in every one of those categories who has successfully bootstrapped a business, but bootstrapping as we know it is systematically tilted against underrepresented founders in a way that we believe justifies a countervailing strategy. You seem to be arguing (and I'd agree) that underrepresented founders find it much more difficult to get to the point at which Earnest (and others) would normally invest. What with them not having access to the considerable personal or F&F capital necessary to get there. So it seems like you'd have to invest earlier, when there's more risk. Now, I'm happy to believe that - because these founders are underrepresented - you can find 'better' founders overlooked by others. But still, at that early stage, the risk will be significantly higher than at the P/M fit, post-revenue stage. So I'd love to hear how you plan to offer terms that won't be called out as predatory (or somehow taking advantage of underrepresented founders) by others? |