[chimi]

Risk and reward. No bank is going to loan a company at this stage money and there's no guarantee the investors who are providing this money will get any return at all and there is no collateral, so the founders should pay more for the money.

[jetti]

See the wording for me makes it seem that the backers would get a percentage of ANY income that the person makes, regardless if it had to do with the project funded or not, for 10 years.

[lsc]

yeah, that's also how I read it; but I just see that as 'paying MORE' than you would on a regular loan.

Of course... depending on how they do the percentage, it could be, you know, a good problem to have; I mean, if you end up paying a percentage of a very large income, presumably those dollars have a lower marginal value to you than when you were just getting started. And wealthy contacts, especially wealthy contacts that have an interest in seeing you do well are an incredibly valuable thing to have.

And it really couldn't be too crushing on the low end, as it's not like student loans, these would be subject to bankruptcy.

I mean, it seems like a reasonable idea; at least, more reasonable than most student loans.