[loceng]

What I dislike most is the unlimited extra icing. The first part with the cap is nice because the return is measurable. The unlimited extra icing required to be given on the tail end (based on negotiated %, whatever that range may be) is however not measurable, nor is what value the network may actually bring even at a basic level - and assumption is generally bad. If it was a % up until a cap of $ then arguably that's more digestible, more tangible, because it allows weighing of a reciprocal relationship within a best or worse case scenario; and of course you think that extra payout on selling company is nice but that is weighted towards the investors. A different mechanism does introduce an issue with figuring out how to implement follow-on investment agreement if future funding is a loan with 2-5x return with % equity until a $ cap; not explaining myself so well here.

I just don't like uncertainty and I like measured fairness. I understand the excitement of getting an extra payout if there's a big exit but I feel 2-5x return on investment is already a great payout - and I don't like the VC justification that a higher return is aimed for to diversify risk because that's just an excuse for VCs that are making bad investments in an unskilled, inexperienced way, hoping for a few unicorns of 100x+ return that cover the losses of bad investments + that provide all their profits.

Ultimately my goal, if I ever raise any outside money, is to retain as much equity as possible, for myself and for the team - especially early on so then later at higher sums of money are necessary for expansion then equity is more likely to be necessary to be part of the equation but the company being in a better position allows better leveraging.

I'm not trying to disparage, this is much better than traditional VC already and I also like what Indie.VC is doing - the flaming unicorn in the hero of their landing page is a nice Minimum Viable Personality touch too. Just used this opportunity as a thought exercise, I appreciate your responses. Maybe the timing just isn't right for me to be able to as reasonably consider this model until I am certain I would continue on the external fundraising path.