Square Capital
Shopify Capital
Stripe Capital
Google Capital (GCP credits)
Amazon Capital (AWS credits)
Etc
Etc
Etc
The Internet’s version of quantitative easing...
Shopify Capital
Stripe Capital
Google Capital (GCP credits)
Amazon Capital (AWS credits)
Etc
Etc
Etc
The Internet’s version of quantitative easing...
...lowering the cost of capital is a great way to super charge growth of your platform and create the necessary boundary conditions for lock-in...
So who are the winners:
First and foremost: The platforms that provide the most flexible and fastest pools of capital to those who need it
Second: the companies who take advantage of it to grow in new, non-dilutive ways
First and foremost: The platforms that provide the most flexible and fastest pools of capital to those who need it
Second: the companies who take advantage of it to grow in new, non-dilutive ways
Who loses?
1) lenders (traditional banks) get crunched on their ability to arb the vig because borrowers of record (stripe, square etc) shop their deals relentlessly
2) LPs because VCs pay more for less because the companies they invest in have grown faster on less capital
1) lenders (traditional banks) get crunched on their ability to arb the vig because borrowers of record (stripe, square etc) shop their deals relentlessly
2) LPs because VCs pay more for less because the companies they invest in have grown faster on less capital
The tide will only change when real rates go up...so in the meantime, until you see rates actually going up, I’d be long these new capital providers as they should grow at superior rates to the market.
