Sweat Loan
A Sweat Loan is an agreement where repayment may involve providing services or labor in lieu of traditional financial repayment, often utilized in early-stage startups with limited cash resources.
Benefits
A sweat loan allows repayment through services or labor instead of money, often used by early-stage startups.
Frequently Asked Questions
What does syndication mean in investment?
Syndication in investment means combining resources from multiple investors to finance a larger deal.
What is an example of sweat equity?
An example of sweat equity is a co-founder receiving shares in a company instead of a salary in exchange for their work and contributions.
Is sweat equity a good idea?
Sweat equity can be a good idea as it allows contributors to gain ownership without upfront capital, but it can lead to dilution and disputes if not managed properly.
Key Takeaway
A sweat loan allows startups to repay loans with services or labor instead of money.