What this teaches
Danco argues that recurring-revenue businesses funding predictable growth with dilutive equity is a historical accident, and predicts the rise of revenue-based and debt financing for startups. Sparked a wide industry debate.
Why it matters
The reference essay for understanding when equity is the wrong instrument for your raise.
Key lessons
- Equity should fund experiments; predictable growth can be financed cheaper
- SaaS revenue streams are financeable assets
- Every funding instrument encodes assumptions about risk; match instrument to use
Building your investor list? Browse 1,000+ investor profiles on VCMatch and find the funds that actually match your stage and sector.