Accounting for startup financing from Pipe
John Street Capital did a deep dive comparing Pipe to the three traditional types of external financing in Recurring Revenue: The Rise of an Asset Class. Based on his assumptions, he found that Pipe was the cheapest cost of capital for a fast-growing, subscription-based business.
Packy McCormick • Pipe: Business-Funding Fit
Pipe is building an entirely new asset class based on recurring revenue contracts. It’s not equity and it’s not a loan. Pipe lets businesses raise money today by selling their monthly or quarterly subscription cash flows directly through its platform.
Packy McCormick • Pipe: Business-Funding Fit
once you’ve got product-market fit with a rinse and repeatable growth strategy, spend is going to shift toward S&M away from R&D and raising equity to plug the CAC to payback gap in cash flow seems like an incredibly expensive way of achieving this when alternatives like Pipe exist. I think VCs that invested at the earlier stages are very aligned h... See more