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Comment by OJFord | Hacker News Reader

Yeah, the FAQ makes it sound like it's different because they 'buy your recurring revenue'.. but I'm sure if you lost that overnight you'd still owe back the... 'sale price', so it is just plain old debt.

'Supply' chain financing for hip small SaaS businesses.

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> but I'm sure if you lost that overnight you'd still owe back the... 'sale price', so it is just plain old debt

I'm actually not sure about that. Maybe it's the buyer who carries the risk of the customer not paying for the contract. Maybe. It would be great if a company that provides financial services actually explained said services.

If they carried the risk the discount would be much more than 6%.

That part is not clear. From the buyer perspective though, unless I intend to use it, or the seller gives me a pretty steep discount, this is equivalent to buying “cash”... so it’s generally a bad investment?

I think the numbers may work for the seller because the incremental cost of an additional SaaS subscriber is about $0. But a company needing funding doesn’t inspire a lot of confidence to buy a low upside asset from.

Having talked to a competitor of Pipe they do take on the risk of the customer not renewing.

So it is indeed not debt. Probably.

which competitor

Who takes on the risk of the customer not renewing? If a customer defaults on a contract, the SaaS company has to refund Pipe. That's debt.

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