Earnest Capital

I'm working on FormAPI [1], which helps developers fill out PDF documents. I started working on this around 2 years ago. I was mostly working on it part-time, and I took a few breaks while I was doing freelance work to pay the bills. This year I raised some money from Earnest Capital [2], which has allowed me to go full-time and hire some contractors. I used to think that I wanted to build a one-person company and stay very small, but I wasn't able to pull that off. I picked a niche that was too small, and I also didn't have the skills to execute very well (especially in marketing, sales, etc.), so growth has been quite slow. So I've exploring some new features that could increase the number of potential customers, and the new scope is going to be way too much work for one person, so I'm looking forward to building a small team of 5-10 people. Earnest Capital has been really awesome, and I still think the SEAL is a good deal [3]. My experience has been similar to an accelerator program, but with a bit less pressure. I've had some really helpful calls with mentors, and the weekly update calls are also great for accountability. So I would recommend Earnest if you want to raise some money while building a sustainable company. [1] http://formapi.io [2] http://earnestcapital.com [3] https://earnestcapital.com/shared-earnings-agreement/

> what is the answer for funding growth at post-revenue companies that don't fit the hyperscaling model? Lots of alternatives emerging these days, like https://tinyseed.com/ or https://earnestcapital.com/ (haven't worked with the latter, but worked with the former)

> I had a lot of discussion with my founder about funding. Until now, I'm happy we did it bootstrap. You'd have great luck with rolling seed stage funds like https://shl.vc/ and showcase events like https://mercury.com/raise If you plan to not go down the traditional (go big or go home) VC route, then, check out these (go slow and go steady) funds: https://indie.vc/, https://tinyseed.com/, https://earnestcapital.com/ (not an endorsement)

Sounds like https://earnestcapital.com is right up your alley.

Isn’t this essentially a different way of doing what Earnest Capital is already doing? https://earnestcapital.com/

Yes, VC returns are dominated by the huge hits, so everyone is chasing those. Google almost certainly returned more than every other investment made that year for example. For a tens of millions pitch go to Earnest Capital who will be perfectly happy to invest. https://earnestcapital.com/

Lots of reasons, although as i said in my post, unless it's a "strategic acquisition" at a huge multiple, it's usually not because "the math" of selling makes more sense than holding it. In my case, having the liquid capital from the sale allowed me to start a fund to invest in more companies like this (https://earnestcapital.com/). Something I probably couldn't have done while operating my SaaS and just out of the business's profits. Other reasons are that the acquirer is a better fit to take the business to the next level, so if you hold it the business will likely degrade whereas a buyer has the capacity to invest in and grow it... also to create opportunities for growth for talented employees who may otherwise get bored and leave.

You're welcome! There are some alternative funding sources for bootstrappers that could be interesting for you: - TinySeed (https://tinyseed.com/) - Earnest Capital (https://earnestcapital.com/) - Indie.vc (https://www.indie.vc/) Each works a little differently. My friend Matt Wensing did a comparison of them: https://medium.com/swlh/alternative-funding-calculus-a-quant-compariso… Hope this helps!

There exist investment firms where some measure of return to society is incorporated into investment decisions (see e.g. https://acumen.org/). If your business is creating some sort of positive externality, then seeking these sorts of investors (whose problem interests are aligned with your company's) may be a good fit. It sounds like what you actually want to do, however, is just create a vanilla business and put a cap on what is returned to investors. You can do this -- in fact, you can do whatever you want, the world is your oyster. The only question is if anyone will invest. VCs who want an unbounded or very large upside won't, but there exist investors who will probably waive the right to any unlikely windfalls for more certainty of low-level gains. See e.g. https://earnestcapital.com/about/.

Seems like this trend is only starting to begin... https://earnestcapital.com/investment-memo-fund-2/

Good feedback. I agree with your first point. I think that outside of Silicon Valley we actually have a crisis of lack of access to early-stage capital for entrepreneurs (and hence the multi-decade decline in new business starts). There are a lot of both underserved and underrepresented entrepreneurs right now and and it's a real challenge to define the area of focus. Point is well taken about not just writing a check. I don't get into it in this specific post because the pitch is basically Typical Earnest + a focus on underrep'd founders. But Typical Earnest already includes a community, shared resources, and access to an awesome group of mentors: https://earnestcapital.com/about/

Within the modern tech community, bootstrapping is definitely a budding minority. You can tell because a bunch of investment firms have recently popped up to try to capitalize on this new wave, like Earnest Capital. https://earnestcapital.com/funding-for-bootstrappers/

I'm curious if any firms will be created where they're happy receiving 2-5x return after 5-10 years, the terms of these novel investment firms - arguably better than traditional VCs - are still trying to get extra icing from the cake and not just happy with the icing on their own slice. Re: https://earnestcapital.com/shared-earnings-agreement/ "One reason for wanting to handle every possible outcome is that we are committed to a SEAL not having any control over the business: no equity, no shares, no board seat, no preferred voting rights." isn't congruent with "... there is a residual Equity Basis that remains after the Shared Earnings Cap is fully repaid" - I'm not sure if I'm misunderstanding or you're first saying there is in fact an equity-like function but in the conclusion claiming "no equity" taken? Also, anything regarding to the value of the mentors-investors that they claim will help out an investment (because they're incentivized) is all just ear candy and hype without evidence that they'll actually add any value or give useful direction for whatever business model(s) you implement. Maybe earn trust with founders before asking for or expecting extra icing?