When a company becomes a verb, they change the game.
Google it. Uber it. FedEx it. Up next, “Pipe it".
Here's why.
Every company with a high degree of predictability in their revenue can now pull their revenue forward to invest in their growth without diluting their equity. "
'By taking the underlying contracts that generate recurring revenue streams and making them tradable for the first time, Pipe has unlocked a multi-trillion dollar asset class, revenue,' billionaire Social Capital CEO Chamath Palihapitiya said in a statement."
I've never met a founder or executive who doesn't complain about the fundraising process.
Typically using words / terms such as "dilution is brutal", "distracting", "time consuming", "pulls me away from building my business", "necessary but it's kind of the worst" etc.
Implications for companies in hyper-growth stage are extraordinary.
Imagine a founder who pulled a 0 to 1, found initial product market fit and has 7-figure ARR.
Now they can pull that revenue forward, protect their team's equity and then invest the capital along with their equity in recruiting world-class talent that they might not otherwise have been able to attract.
Instantaneously.
Implications for Corporate Strategy / Dev more broadly are substantial.
Recurring revenue is always attractive.
Even more so when you're considering how to evolve your go-to-market-strategy and structure longer-term client contracts in order to finance your growth in a non-dilutive way.
Let's do an "imagine that" exercise in Sports, Media + Entertainment.
You know who have a couple predictable revenue streams?
Professional sports leagues, franchises, ballplayers, artists, media companies, creator economy ecosystem players etc.
Imagine what kind of growth, innovation + impact they can unleash by investing the capital they pull forward? Imagine the kinds of businesses they could seed?
One more thing, Pipe calls Miami home. Wynwood to be more specific...
Pipe it. Know what I mean?
March 13, 2021 (Tweet Link)