John Gallagher

@BillAckman @SecYellen @firstrepublic The FED might want to speak to some Irish government officials from around the time we guaranteed bank deposits and bonds - same thesis of giving market confidence - resulted in nationalization of pretty much every Irish bank and an IMF bailout. Be careful what you take on!

.@SecYellen has apparently pushed the SIBs to recycle some of the deposits they received from @firstrepublic back into FRB for 120 days. The result is that FRB default risk is now being spread to our largest banks. Spreading the risk of financial contagion to achieve a false sense of confidence in FRB is bad policy. The SIBs would never have made this low return investment in deposits unless they were pressured to do so and without assurances that FRB deposits would be backstopped if it failed. The market has responded to this fictional vote of confidence with a 35% after-market decline in FRB stock. FRB is no SVB. It is a well-managed, well-capitalized, high-service bank with good assets that is beloved by its clients. It is caught up in a bank run due to no fault of its own. It does not deserve to fail. We need a temporary systemwide deposit guarantee immediately until expanded and modernized @FDICgov insurance system is made widely available. The press release announcing the $30B of deposits raised more questions than it answers. Lack of transparency causes market participants to assume the worst. I have said before that hours matter. We have allowed days to go by. Half measures don’t work when there is a crisis of confidence. Again, I have no investments long or short in the banking sector. I am simply extremely concerned about financial contagion risk spiraling out of control and causing severe economic damage and hardship. We need to stop this now. We are beyond the point where the private sector can solve the problem and are in the hands of our government and regulators. Tick-tock.

@HarryStebbings Plenty of lenders who would do this wihtout the equity requirement but the business has to be able to support the loan. Debt can't take the risks an equity investor can so the business has to be pretty stable

Speaking to a friend who runs an amazing bootstrapped business. They need a loan to execute on a guaranteed contract. They approach reputable tech financing house. They are told no, you haven’t raised $5M. WTF, raising is not a sign of a good business. This is BS.

@jasonlk That and the dreaded downround they would face if they tried to raise any fresh funding at the lower valuations

The Simple Reason Startups That Just Raised $100s of Millions Are Doing Layoffs saastr.com/the-simple-rea…

@yash_tek And the #founders have a far greater probability of creating a sustainable, valuable business for themselves, their customers, investors and employees

Most VC-backed startups would be better off as SMB+ style businesses. Startup education focuses on bootstrapping or VC – two polar extremes. There's a forgotten middle class of startups - the middle-market. Some surprising stats on middle-market ($10M - $1B) businesses 👇🏽

@yash_tek You missed the more established finance partners like @elementsaas

4/ there's also an increasingly large pool of non-dilutive funding available for revenue-generating businesses. pipe, founderpath, and stripe capital are the biggest players here – more emerge every day.

@CiaranGilsenan That’s the most impressive BBQ I’ve ever seen an Irish man put on! There must be a bit of Texas in you Ciaran

First #grill of the year. Ribeye, halloumi and veg on the menu tonight. #parrilla

@IanRountree @sarah_cone Would love to talk to these founders, we might be able to help out!

@sarah_cone Might be same founder ;)

Talked to a founder whose company is profitable with ARR in the $10-20M range but not it's necessarily on VC-style rocket ship trajectory. He's been taking out LBO-style debt to buy out his Seed investors at ~5x ARR. I respect the hell out of that.

@aaronbird @kirbywinfield @jheitzeb I’ve met loads of them and their all doing pretty awesome!

@kirbywinfield I think @jheitzeb at CrowdCow lasted the longest that I know of. I think that was also a growth round, so arguably different than this.

so many second time vc backed founders start out like "no way am i raising venture for this one" and then 3mos later it's $10M on $50M pre.

@paulg Especially when the professors have never started a business, it really is incredible!

Taking classes in "entrepreneurship" in college is like going to the Louvre and spending your time looking at the floor.

@ShobhitJethani @paulg Way more than VC is that’s for sure

I was talking to another founder who took venture debt. "Secured by the equity in your company?" I asked, already guessing both the answer and the result. And indeed, the lenders had tried to call the loan on a technicality. Only toughness and good lawyers saved him.

@paulg I’d love to see the success stats for founders using VC versus Venture Debt. I bet VC’s have a less than ten % success rate, whereas Venture debt simply by its nature and returns dictate above a 90% success rate. I think the VCs just don’t like the competition!

@patphelan @hkanji Cheaper than selling equity, for those who don’t need more people at the table. Always a balancing act getting the right people and right money

@hkanji Only issue is, debt is dumb, it doesn't have the value of a partner who works with you, it's a part of but not an alternative

Capital is competing to lend to hot startups protocol.com/newsletters/pi…

@FastCompany @AthleticGreens Congrats to the team at AG. @elementsaas has been delighted to support over the last 12 months. Continued success to you all.

Athletic Greens is now a unicorn. Its unicorn goal: Be this generation’s cool beverage f-st.co/ufDzIzq

@tylertringas scaleworks.com are great operators

Who are the best/new private equity shops buying $1m - $20m ARR software businesses? Building out our internal database

@yoda Defo need a ride on mower there!

@jaimalik Most VC investors have never run a company. Of course they are trying to do a good job, they have investors and with little skin in the game they make money on carry. The key for founders is getting the the right investment at the right time from the right people. Never easy!

@AlanMeaney Using debt like @elementsaas provides, keep the ownership in the founders pockets.

Delighted to partner with our friends at @Calqulatemetrix to discuss raising Venture Debt and the differences between pitching Equity and Debt investors tomorrow. Registration details here: us02web.zoom.us/webinar/regist… #VentureDebt #saas #fundraising #founders

@alex You wanna see the Eurovision Song Contest!

Ok but why does England get to play if they did the ol brexit

@paulhayesman It’s like VC throwing money at companies that make no sense, big oil is no different

I’m no arsonist but pouring water on a fire in the actual folic king water doesn’t seem like the smartest play