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Debt is coming to the tech industry

alexdanco.com

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Re: Debt is coming to the tech industry

#3

Post by dnadler »

ghastmaster wrote: post #2

Debt is dumb. The childish glee coming from this author should be ignored. 2008 is coming again soon and debt holders will suffer. Please get/keep your financial house in order. Business debt is just as dangerous as personal debt.

Debt is a very useful tool for raising capital. It is a way to raise money without selling ownership, and is often the wiser choice. It all depends on the situation. Blanket statements disparaging (or encouraging) debt without regards to the situation are dumb.

Re: Debt is coming to the tech industry

#4

Post by shin_lao »

ghastmaster wrote: post #2

Debt is dumb. The childish glee coming from this author should be ignored. 2008 is coming again soon and debt holders will suffer. Please get/keep your financial house in order. Business debt is just as dangerous as personal debt.

Debt is one of the financial tools at your disposal. Properly used, it's extremely powerful.

Re: Debt is coming to the tech industry

#5

Post by kevingadd »

Aside from the other conclusions and assertions in this long article, this particular bit resonates with me:

"Here is a widely believed cause-and-effect relationship I bet you’ve never thought to invert before: because most startups fail, therefore equity is the best way to finance them. Have you ever considered: because equity is how we finance startups, therefore most startups fail?"

At the very least, this lines up perfectly with my startup experiences and many other case studies I've seen - investors simply are not willing to accept reasonable growth or reasonable returns, they want massive scaling and massive growth. Sometimes that approach works out but very often you get expensive bets that never deliver on the level they need to and the startup flames out or ends up stuck constantly trying to clean up the mess left by the last big bet while trying to execute on a new one. A revolving door of new executives and new business strategies.

Re: Debt is coming to the tech industry

#6

Post by sykick »

ghastmaster wrote: post #2

Debt is dumb. The childish glee coming from this author should be ignored. 2008 is coming again soon and debt holders will suffer. Please get/keep your financial house in order. Business debt is just as dangerous as personal debt.

When you say, "Debt is dumb" are you speaking in hyperbole? There are lots of examples where debt is not dumb and is in fact the prudent thing to do. If you aren't speaking in hyperbole you are wrong and if you are I suggest that in this case you shouldn't.

Your overall point appears to be that a repeat of 2008 is immanent and this point can be better made without the "Debt is dumb" first sentence.

Re: Debt is coming to the tech industry

#7

Post by ryanlol »

ghastmaster wrote: post #2

Debt is dumb. The childish glee coming from this author should be ignored. 2008 is coming again soon and debt holders will suffer. Please get/keep your financial house in order. Business debt is just as dangerous as personal debt.

>Debt is dumb.

This attitude is dumb.

Re: Debt is coming to the tech industry

#8

Post by kevingadd »

ghastmaster wrote: post #2

Debt is dumb. The childish glee coming from this author should be ignored. 2008 is coming again soon and debt holders will suffer. Please get/keep your financial house in order. Business debt is just as dangerous as personal debt.

How do you propose solving problems like "buy a house" and "buy a car" without debt? The average person who needs to drive to work has no way to buy a car in cash, at least not early on. If you drop all your savings on a new car and suddenly end up with a hospital bill, that car isn't going to pay for it.

I say this as someone who had enough saved to buy a car in cash: Buying it via a loan was the right choice. It boosted my credit rating and more importantly when emergencies came up I had that cash on hand.

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