Steve Benson

speaker

874 appearances 4 recordings 1 series first heard Mar 2020 last heard Dec 2023

Steve Benson’s voice in public audio — every appearance, attributed to the second.

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Top Founders · How I hit $5m ARR, kept control using 3 different debt providers · 21 Oct 2022 podcast

I think for me, it worked out to be about 18% cause we weren't that good at growing, but if we had been good at growing, it would have been a lot more expensive.

So,

Key terms to watch out for, and I'll go over a slide on this later, but one of the key terms to watch out for, these guys had a term in there that I don't think is too uncommon, but I didn't catch it.

I mean, I went over this contract with a fine-tooth comb, but didn't catch this.

They had a term that if we wanted to exit the loan early, like after two years, it was a four-year loan, if we want to pay it off after two years and take our money somewhere else,

We had to pay them all the interest as if we had been there for four years, which is like, fuck off.

So the way I got around this was I did another tranche with them.

So my last tranche with them, I basically just did because I wanted to renegotiate the terms.

And I was like, okay, I'll do another 250k with you, but

We're going to have to renegotiate the terms.

And so I got that term redlined.

I think they knew it was worth the bullshit.

And I don't even know if they put that in today, but that's a key term to keep your eyes out for.

Unfortunately, these documents are like 40 pages long with a lot of these lenders.

So...

Key thing to understand about them, they would loan to about 4x MRR.

And these guys, that tends to be not super negotiable because it's what they've promised to their LPs.

So obviously if you're loaning 8x MRR compared to 2x MRR, it's way more risk, right?

It's way harder for a company to pay back.

It's pretty easy to pay back.

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