Fund Your Next Startup with a Founder Income Share Agreement 👀
Plus, The Wolf of All Streets, Scott Melker on the pod!
Good goodness, Bitcoin is testing even the YOLO’est of investors! At the time of Scott Melker’s interview BTC was about $38k/coin, by the time of publishing, it had cratered to $28k 🤦🏼♂️ When I wrote this sentence Bitcoin had rebounded to $34k… by the time you open your email — God only knows.
I’ve long stated that I believe in a global digital currency, and that I’ll invest in just about anything with upside, but my faith in Bitcoin is shaky at best.
How do Bitcoin Bulls do it?? I asked Scott Melker on my pod — as one of the biggest crypto bulls out there, he basically laid out his method of investing and how/why conviction impacts your ability to successfully invest in such futurist, volatile assets.
Listen to my interview with Scott Melker here 👉 https://spoti.fi/3qjUoCC
For my noobs; every week I breakdown a startup pitch with the added hook that you don’t have to be a rich dude to invest (if you don't know what that means, click here).
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Chisos allows founders raise capital via convertible income share agreements.
Chisos is a fintech investment platform that invests in idea-stage and side-hustle founders who are undiscovered and underfunded by traditional capital sources. Chisos invests $15-$50k using a Convertible Income Share Agreement (CISA), which combines an income share agreement (ISA) with the founder and a small percentage of equity in the founder’s business.
Meet the Founder
Watch my full interview with Chisos founder, here.
William Stringer is the co-founder of Chisos. Prior to Chisos, Will spent more than a decade in investment banking first at Merrill Lynch, then at a $1B+ AUM family office where he was reviewing and managing hundreds of private and public opportunities.
Will has been investing since high school — from stocks and startups to oil and gas. Interestingly, you don’t see a lot of iBankers leave the racket to chase the far less lucrative gig of funding very early stage founders. In Will’s case, his career path actually makes sense. First he sees the stodginess of big banking, then experiences first-hand the limitations family offices have, then he starts angel investing and the💡goes on. How do you solve for an inexperienced founder with little to no network??
You don’t. You reinvent an investment vehicle that’s hiding in plain sight!
Addressing the $4T blindspot in startup financing by backing high-potential, overlooked founders
Raised $550K pre-seed operating capital & $500K Fund I; currently raising $10mm Fund II
Developed platform with proprietary underwriting algorithm; automated application & diligence process
200% online application increase in 2021; 10 completed investments to date
~$20K ISA repayments; Returning ~10% of Invested Capital to Fund I LPs in 2021 (est.).
This is completely new. The fact founders are already making regular ISA payments suggests Chisos is likely outperforming several Seed funds 😂 Between education and athletes using Income Share Agreements it makes complete sense that founders could also take advantage of this asset class too! In fact, one could argue this Chisos provides quicker, more flexible funding for founders and far more reliable returns to investors — a win, win.
Terms & Takeaway
Invest in Chisos here 👉 https://bit.ly/3gP6O20
Security Type: Convertible Note
Valuation Cap: $15,000,000
Investment Goal: $1,070,000
Raised (as of publishing): $467,546
Minimum Investment: $100
Here's what I like: I think this is brilliantly inventive and a no brainer for founders in need startup capital, without dilution or bad credit debt. Sure, typical angel funding comes with relatively zero strings attached and with Chisos, you actually owe somebody money at some point; but early dilution adds up quickly and all of that is to say you actually have access to angels in the first place.
Speaking of which, imagine how this impacts minority founders that have historically struggle to get funded?? This is a platform to apply for capital in a strictly merit-based fashion that gives ANY founder the chance to prove the doubters wrong!
Plus, investors love to say, “we invest in the founder”. Here’s your chance!
Chisos has essentially invented a new way to invest in startups without ALL of the risk (or upside)… which leads to 👇
Here's what I don't love: For the right investor this math makes sense, but as long as early stage valuations are insane and founders can basically walk away debt free; the target market is going to remain niche. It might be hard to compete against the big money investors shepherding VC backed startups (for good or worse) to exit. Other than that, Chisos should be able to produce nice returns, with a few gems sprinkled in.
Who should invest and why: Chisos has a $15M value cap, which is rich but not ridiculous given what you’re investing in — you’re not investing in an ISA fund, you’re investing in the entity that owns/operates ISA funds. If you truly enjoy backing great founders and would happily trade some upside for a lot less risk, Chisos is a great deal.
As always, startup investing is super high risk, anything can happen. Especially when that startup makes money investing in other startups (again)... 🔥 💸
Invest in Chisos here 👉 https://bit.ly/3gP6O20
Questions? DM me on Twitter @kitun
Disclaimer: It goes without saying, but this information should not be constituted as financial advice, my investing opinions are my own and all diligence is the responsibility of each individual investor.