Debt is Coming by Alex Danco

TL;DR - VC thought leader Alex Danco outlines his views on the way debt financing will become increasingly prevalent in VC.

Helpfulness - 3

Tags - notable investors, thought leaders, funding trends, debt, useful diagrams

Questions addressed:

  • Who is Alex Danco?
  • What is his role as a VC thought leader?
  • What are his views on future trends in fundraising?

Summary:

  • Alex Danco is a former VC at Social Capital who now works at Shopify Money.
  • He acts as a VC thought leader through his weekly newsletter.
  • Danco predicts the biggest change in next decade will be debt coming to the tech world.
  • The tech world may be reaching a turning point where future cash flows and costs of capital become more predictable for investors and operators respectively.
    • The SaaS recurring revenue model seems relatively stable and mature.
    • This looks more like regular finance than VC.
  • Recurring revenue models almost seem like fixed income yielding securities.
  • Equity only works for one narrow vision of success; founders may begin to demand more.

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