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Earnest Capital Trailhead

by sahillavingia on 5/14/20, 3:15 PM with 54 comments

  • by arvidkahl on 5/14/20, 3:34 PM

    I really appreciate how this is an inversion of the "time-honored tradition" of making founders do loads of extra work within arbitrary deadlines in addition to growing their company. Too often, this is more a one-sided scramble (resembling an "audience with the king") than a mutually respectful conversation.

    It's really promising to see that you value the time of the founders you fund so much that you are ready to talk to them in a way that suits them, not just you.

    I like this.

  • by tylertringas on 5/14/20, 3:18 PM

    hey folks, I'm the founder of Earnest Capital and love to hear questions or feedback. The gist here is I think the way we make founders pitch investors is pretty lame and we can do better. Definitely a v0.1 of our thinking here and would love suggestions for how to take it further.

  • by joekrill on 5/14/20, 6:15 PM

    I hate when things pop up when I select text, because I have a tendency to randomly highlight text as I'm reading it.

    This little speaker pops up, so I clicked it out of curiosity, and it started to speak the text. The icon choice is a little unusual (I'd expect a play button or something, but that icon is typically used to control volume). But then I couldn't get it to stop playing. I even closed the tab and it was still playing. And for some reason Chrome doesn't show that tab as even playing audio so I could mute it. What the heck is going on there?

  • by loceng on 5/14/20, 10:07 PM

    I'm curious if any firms will be created where they're happy receiving 2-5x return after 5-10 years, the terms of these novel investment firms - arguably better than traditional VCs - are still trying to get extra icing from the cake and not just happy with the icing on their own slice.

    Re: https://earnestcapital.com/shared-earnings-agreement/

    "One reason for wanting to handle every possible outcome is that we are committed to a SEAL not having any control over the business: no equity, no shares, no board seat, no preferred voting rights." isn't congruent with "... there is a residual Equity Basis that remains after the Shared Earnings Cap is fully repaid" - I'm not sure if I'm misunderstanding or you're first saying there is in fact an equity-like function but in the conclusion claiming "no equity" taken?

    Also, anything regarding to the value of the mentors-investors that they claim will help out an investment (because they're incentivized) is all just ear candy and hype without evidence that they'll actually add any value or give useful direction for whatever business model(s) you implement.

    Maybe earn trust with founders before asking for or expecting extra icing?

  • by embrassingstuff on 5/14/20, 8:00 PM

    There is no such thing as bad capital.

    But looking at the web site, over approx 2 years, 15 investments, I presume low-6-figures.

    So out of 1000s online applications of "self builders" u have a 1 in 1000 acceptance rate?

    This statistic is just as important as being "founder friendly" or "no song and dance needed".

  • by jkarneges on 5/14/20, 5:14 PM

    Great to see innovation in the fundraising process. As a founder, the things that bother me the most about fundraising are:

    1. The experience imbalance. VCs do pitch meetings every day for years on end. Founders, not so much. No wonder the expectations mismatch.

    2. Wildly unpredictable outcomes. Early stage fundraising is more like working a fuzzy strategic partnership than applying for a loan. The same inputs probably don't produce the same outputs.

  • by burlesona on 5/14/20, 3:33 PM

    This looks pretty cool. The experience of doing this sounds very similar to participating in YC Startup School.

    > You can leverage the Founder Summit forums for feedback from the Earnest team and our broader community of awesome founders and mentors (a free trial is included for everybody on Trailhead).

    I’m not familiar with the founder summit forums, but this sound sounds similar to the community aspect of Startup School.

    You mentioned that people get a free trial, but it sounds like someone can sign up for trailhead and stay in it for the long term without ever deciding to raise the earnest. What do you guys do in that case? When does someone get kicked out of their free trial? :)

  • by koolhead17 on 5/14/20, 7:14 PM

    Love what folks at Earnest are doing. I was reading one of the draft LP documents, I am assuming it was shared here.

    Keep up good work, we need a different route/way of building business as well. :)

  • by guptaneil on 5/15/20, 2:43 AM

    Congrats on the launch! Both Trailhead and SEAL are very interesting ideas, and I really hope they take off (read: get copied by more investors ;)

    As an early stage bootstrapping founder, I'm curious to see how Trailhead works in practice. But regardless of whether or not it works, thanks for thinking like a founder and being willing to experiment.

    btw small typo: the link to 1 Second Everyday in your portfolio actually directs to yac.chat

  • by pcmaffey on 5/14/20, 5:24 PM

    One concern with this kind of model is the potential for it to become a honeypot for widespread data collection (eg. Startup School).

    Any thoughts yet on how to address that?

  • by jrenshaw on 5/14/20, 3:41 PM

    Looks interesting, but curious about the name. Trailhead is a fairly well known trademark of Salesforce:

    https://trademarks.justia.com/865/88/trailhead-86588816.html