Jay Batson on Revenue-Based Finance


Manage episode 261699213 series 1318661
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“So, there's been a hole in the market for that kind of company that's going to be a great company that's not venture-scale.”

Repeat founder and super angel Jay Batson talks about his new passion: Revenue-Based Finance. He likes the possibility it opens up for startups that are great but not quite venture-scale. Learn what RBF does for founders and investors.

Highlights include:

  • Sal’s Intro
  • Jay Batson’s Bio
  • Acquia & Drupal
  • Revenue-Based Finance Is Introduced
  • The Debt Model vs. The Equity Model
  • “Well, the problem is, there's kind of a hole in the middle, because banks don't like to take risks that startups pose.”
  • “So, venture capital is great if your company is the kind of company that will provide large capital gains to the investor.”
  • “…venture investors tend to say, "Is this a company that could create a billion-dollar company?"”
  • …"This isn't a venture-scale company,"…
  • “So, there's been a hole in the market for that kind of company that's going to be a great company that's not venture-scale.”
  • Wistia as an Example of a Great Company that’s Not Venture-Scale
  • Being Venture-Scale Means You Have to Grow at All Costs
  • “So, the investor makes money by the entrepreneur's business generating the revenue to provide the investor the returns; the entrepreneur retains ownership of the company during the duration.”
  • “…your returns that you see as percentages on your money, are really going to be defined on how fast the entrepreneur repays you.”
  • “It's not venture-scale, but it's going to be a fine company, thank you very much, but it needs an influx of cash to help grow the go-to-market.”
  • “...we want RBF to be the kind of thing that's notable and well-known for something that people do in Boston.”
  • Sal Talks About His Investment in Gelesis
  • Jay Batson and Sal Discuss Various Aspects of the Current Crisis and How Startups Might Respond
  • “…this won't be the first time you've had to embrace the suck, you know? It's kind of part of the deal of being a founder and being an entrepreneur.”
  • “And then, I hate to say this, but now's the time to cut costs kind of hard and fast, and this may mean cutting some people. And that's really hard to do.”
  • “It's not even just snagging other companies, Sal, it's snagging customers.”
  • “…the things that are happening in the stock market in terms of valuations are probably going to happen to you.”

128 episodes