Season 301 Episode 10204
S2 E7 - Unveiling the Realities of Debt Investing in Crowdfunding: Insights from KingsCrowd’s Bri
Analyzing the Risk-Return Balance in Debt and Revenue Share Deals Through Data-Driven Insights for Regulated Investment Crowdfunding http://s4g.biz/27aug24 tl;dr: Guest Introduction: The episode features Brian Belley, VP of Product at KingsCrowd, discussing his analysis on rates of return on various debt structures and how investors should evaluate compensation for risk. Key Analysis: Brian explains that many investors misunderstand the risks involved in debt and revenue share deals in small businesses and crowdfunding. He highlights the necessary interest rates or payback multiples needed to compensate for these risks. Revenue-Based Financing Explained: Brian delves into the mechanics of revenue-based financing, where investor returns are tied to company revenues, offering flexibility for companies with fluctuating earnings. Failure Rates and Required Returns: Data shows that pre-revenue companies have a higher failure rate (around 5.5%), requiring higher interest rates to compensate investors. As companies grow in revenue, failure rates decrease, and required interest rates also lower. Market Trends: The transcript discusses how rising federal interest rates have influenced the interest rates offered by crowdfunding platforms, showing a trend of increasing returns to align with market conditions. http://superpowers4good.com
