HP started with a bank loan.
Chris Cook has been suggesting revenue-sharing or production-sharing agreements which have both a reduced default risk and a share of the upside. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
Of course, you have to send your LIBOR to a detox center on the Canary Islands, otherwise it will get your whole portfolio sick.
Or just buy the whole damn money market house that was supplying your LIBOR, which ever looks better on the books. When world history is written, Texas will appear as a long elaborate joke.
Decanted a few of the Barclays documents, take a gander yourself:
http://www.docstoc.com/docs/5046490/BarclaysValiha When world history is written, Texas will appear as a long elaborate joke.
On a billion dollar loan, that's 10-20 million a year (because it's on the high side of the deals Jerome describes, call it 10 million). Over the life of that loan, it is a nice, stable (barring acts of god and if everyone does their work well) income for any organization. Internally, the bank employs and pays maybe 2 dozen people to service this loan...not bad. And while this loan matures, other deals are being spun, other deals near the end of their terms.
I have been an early hire in 5 startups. The most any of these manufacturing firms ever grossed was 6 million. (For some reason, the membrane keyboard business - 3 of those starups - loses profitability and management has a much tougher time keeping things running smoothly with anything more than about 6 million in gross sales per year.) Employing anywhere from 20 to 90 people, I rather like Jerome's banking business model more than my manufacturing one.
1% of a billion dollar deal. Ok, sign me up. "It Can't Be Just About Us"--Frank Schnittger, ETian Extraordinaire
