- TOPLEY'S TOP 10
- Posts
- SMARTER IN 10
SMARTER IN 10
Average Semi Stock -27% from Highs
)..
1. Average Semi Stock -27% from Highs
A Wealth of Common Sense
..
2. U.S. AI Construction
Q2 GDP. "US AI investment inched up to another record high in data released this morning, exceeding a $450B/yr pace for the first time. It's now the largest single category of US physical investment, more than single-family homes, factories, power plants, and more".
@josephpolitano
..
3. Airline Margins Around 3-6%....Airline Margins on CC Points 50-60%
Statistics
..
4. Top 10 Buyers Markets in American Home Sales
..
5. Gen X and Millennials Ahead of Boomers in Wealth
A Wealth of Common Sense
.
6. Up in Smoke
Semafor
.
7. Iranian Entertainer Sentenced to 74 Lashes for Singing Without a Hijab
Perplexity
.
8. Roughly 1-2 Million Landlords were Killed in China During Mao Regime in 1950s
Perplexity
..
9. Venture Capital Only Funds 1% of American Business
The 99 Percent Funding Rule Every Founder Should Know Before Borrowing Money-INC.
Every funding approach has its purpose. The key is to find the approach that’s best for what you need.
Venture capital just had its best half-year on record, with more than $400 billion raised industry-wide. None of that money was going to you if you were a regular business, however. Only a quarter of one percent of American employers benefited, leaving the other 99 percent to take a different funding approach altogether.
If you’re among that 99 percent, this doesn’t mean your business is uninvestable. It just means you’re playing a different game with its own pros and cons. Every funding approach has its purpose. The key is to find the approach that’s best for what you need.
Here are some of the smart approaches businesses use to get funding.
Start with the money your customers already owe you
The cheapest capital is cash you can collect even sooner—not a loan. Most of it rests in the customer’s purse with a desire to pay early if there’s an incentive. However, before you seek such funding, find out what getting paid early actually costs.
If you offer a 5 percent discount for annual prepayment on a monthly contract, that works out to roughly a 10 percent discount over a full year. That’s close to what a bank would charge for the same money, minus the wait, the collateral, and the paperwork. You keep your collateral, you’re not personally on the hook if it goes wrong, and there’s no paperwork to fill out.
It’s also quicker to use than it appears on the surface. Sixty percent of small employers sought external finance in the last year, and over half of them used it merely to meet running costs, in effect a timing issue disguised as capital financing.
One founder who runs on this principle is Seyi Ebenezer, founder and CEO of Payaza Africa, a fintech company processing over $4.16 billion in transactions across 26 countries. Ebenezer, who hasn’t raised venture capital, says operational expenses should be funded by operational cash flow, not by borrowing first and asking later.
Bank and SBA credit are cheaper than the alternatives, and slower than you want
Banks are next, and they’re still the best deal if you can wait. The SBA caps how much a lender can add on top of the prime rate, and that allowed markup shrinks as the loan size grows, per the SBA’s 7(a) terms. A $300,000 loan can’t legally exceed 11.25 percent; push past $350,000, and the ceiling drops to under 10 percent.
The catch is speed, or the lack of it. Underwriting takes weeks, and sometimes longer, just at the time when you need it the most, which is last month. According to Ebenezer, bank credit review can run “five to eight weeks”, he says, “and by then, market opportunities may already have passed.” Knowing where to apply is also important; small banks had the highest approval rate of any kind of lender last year, with 57 percent of the people who applied being approved.
Grants are real money, and they just came back online
If your business conducts research, then you should look into grants. Congress last year authorized federal SBIR and STTR funding for six months before it ran out, after which it was reauthorized through 2031. The lesson to learn from that gap is this – this money goes to a mission, not your growth plan, and a source that Congress can remove at the drop of a hat isn’t one to build a hiring plan around.
There is no equity diluted, and there is no equity to pay back. But the awards are still relatively small: USDA has capped most of its grants at $175,000, and the Energy Department’s Phase I awards are capped at about $200,000. The largest of the three is $1.2 billion annually dedicated to life science research by NIH, not as growth capital.
Revenue-based financing, and the number in the term sheet does not show you
These deals make cash loans against future sales, which are returned as a portion of monthly earnings until you reach a ceiling: Borrow $50,000 at a cap of 1.3, repay $65,000. In theory, that appears to be a simple, flat-rate charge.
It’s not, however, because you don’t repay it in one lump sum at the end—you repay a little every day from day one. That means the amount you actually still owe keeps shrinking the whole time, so on average you’re only carrying about half the original balance, not the full amount. This is exactly what makes the real cost so much higher than the flat cap suggests.
I run my own company on this kind of financing, and the highest-return hour I’ve spent on any of it was rebuilding a term sheet into a monthly repayment schedule before signing, because that’s exactly where the real number shows up.
None of this makes revenue-based financing a trap to avoid outright, though. It means this option only makes sense for spending that pays back on the same fast timeline the financing assumes. Inventory that turns over in 90 days can carry that cost and still work; a hire you’re planning to keep for years cannot.
Choosing the right fit
These approaches are really the whole funding ladder for the 99 percent, once you see it laid out end to end. From my experience, the only rule that’s held every time is this: cheap, slow money belongs on things with a long payback, and expensive, fast money belongs on things that pay back just as fast. Before signing anything this quarter, ask for the total dollars repaid, not the rate, and run it against your worst month, not your average one.
..
10. 10 Ways to Build and Expand Perspective
Psychology Today Robyne Hanley-Dafoe Ed.D.
Get curious: Perspective grows every time we are exposed to different ideas, people, and experiences. Read books written by people whose lives look different from yours. Listen to podcasts that challenge you. Ask someone, "Tell me more," and listen to understand rather than just waiting to respond. Curiosity stretches perspective.
Zoom in, zoom out: When something feels overwhelming, zoom in first. Name what's happening and feel what you're feeling. Then zoom out. Ask yourself, “Will this matter in a week?” “In a year?” “How does this fit into the bigger story of my life?” Distress narrows our focus until everything feels urgent. Perspective helps us respond to what is important versus simply reacting to what feels loud.
Notice the stories you are telling yourself: The way we narrate our own lives becomes the perspective we live inside of. “I'm a bad sleeper” is a very different sentence than “I'm someone who can sleep well under the right conditions.” The facts of the night might be identical. The story you carry forward is not.
Collect evidence: Our brains naturally collect evidence that confirms what we already believe. If we believe we're failing, we'll notice every mistake. If we believe we're making progress, we'll start noticing growth. When you catch yourself telling a difficult story, try asking yourself, “What evidence supports this?” and “What evidence challenges it?” Perspective grows when we consider the whole picture, not just the pieces our brain highlights first.
Change your physical view: Sometimes changing your physical perspective helps to change your mental one. Get outside, stand under the big sky, walk beside water, look out over a landscape. There is something about being reminded of how vast the world is that helps us right-size many of our worries.
Borrow someone else's perspective: Sometimes we're standing too close to the problem. Ask a trusted friend, “What am I missing?” or “Help me think this through.” The people who love us can often see possibilities that we've temporarily lost sight of ourselves.
Practice the power of "yet": The attitude we bring to our learning and challenges is extremely important. For example, “I don’t know how to do this” and “I don’t know how to do this yet” send our brain two very different messages. "Yet" leaves room for growth, learning, and hope.
Recognize dual truths: Our brains are hardwired to focus on the negative, and in the midst of life's storms, that makes perspective genuinely hard to hold onto. Perspective expands when we stop believing we have to choose between two competing truths. For example, you can be disappointed and proud of how hard you tried. You can be grieving and grateful. You can feel uncertain and hopeful.
Try “Unfortunately... Fortunately...”: This has become a family favourite of ours. It allows us to hold two truths at the same time, without pretending the hard part is not hard. Unfortunately, I'm stuck in traffic. Fortunately, I get more time to listen to my favourite podcast. Unfortunately, the presentation didn't go the way I'd hoped. Fortunately, I know exactly what I'll do differently next time.
Build a gratitude practice: Our first thoughts of the day are the most powerful thoughts for the day. As soon as you are conscious or awake, say “Thank you.” Waking up to a new day is something to be grateful for. Then take a moment to hold space for what you have and what you get to do today.
Final Thoughts
Every day we have opportunities to zoom in with honesty and zoom out with wisdom. We can get a little more curious, gently challenge the stories our brains automatically tell us, and remember that one bad hour is exactly that: an hour. Perspective widens what we can see and what feels possible. It helps us make what matters most matter most.
..
Did someone forward this email to you? Get your own:
Disclosure
Indices that may be included herein are unmanaged indices and one cannot directly invest in an index. Index returns do not reflect the impact of any management fees, transaction costs or expenses. The index information included herein is for illustrative purposes only.
Material for market review represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
Material compiled by Lansing Street Advisors is based on publicly available data at the time of compilation. Lansing Street Advisors makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to the use such data.
To the extent that content includes references to securities, those references do not constitute an offer or solicitation to buy, sell or hold such security as information is provided for educational purposes only. Articles should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any securities or asset classes mentioned. Articles have been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Securities discussed may not be suitable for all investors. Please keep in mind that a company’s past financial performance, including the performance of its share price, does not guarantee future results.
Lansing Street Advisors is a registered investment adviser with the State of Pennsylvania.