Companies looking to raise capital have options. They can take on debt, sell equity, or a blend. Individuals looking to raise have much more limited options. Until now, individuals have primarily only had access to debt.
We think that’s limiting the potential for entrepreneurship, creativity, and yes, even success in today’s economy.
That’s why we’re taking a different approach.
Our approach to investing directly in individuals, the Convertible Income Share Agreement, works essentially by enabling a person to sell shares in themselves. Our goal is to create a quasi-equity component for individuals. That way, more individuals will be able to access the capital they need to activate and actualize their ideas. This is the real promise of selling shares in yourself.
Today, we’re focused on funding primarily entrepreneurs, but we’re actively pursuing pathways to fund creators, makers, athletes, and beyond.
In this blog, we’ll quickly outline how ambitious individuals can access capital, benefits for individuals in different industries, why investors should care, and beyond.
The reality is that capital options for individuals are pretty few and far between. Aspiring individuals who don’t have access to personal savings often turn to personal debt, like high-interest credit cards.
The next best option for some individuals is to ask their friends and family for money - a risky proposition for the friendly investor or lender.
Consider current estimated capital demand in the U.S. alone:
While businesses can access either debt or equity-based capital, or even a hybrid of the two, individuals simply don't have those options. (Until now - but more on that later.)
It’s something we’ve seen repeatedly: capital can be catalytic if you put it to use at the right moment.
We’ve all heard stories in the startup community about how early stage startup capital allowed a founder to develop an MVP, bring on that key partner, or close that essential sale.
It’s less well-documented - but no less evident - in other fields.
For example, imagine what an athlete could do with $20K to train for the draft. That could mean:
And if that high-performing and high-potential athlete - a performance that’s measured in clear KPIs - manages to become a second-round NFL pick, they stand to land a multi-million dollar signing bonus plus a multi-million dollar salary. Not a bad return on investment.
Imagine being an early stage founder. You have an idea, you’ve spoken to people who could be your ideal customers, and you’ve begun testing the waters to find out how friendly your market is. All signals are positive. Now, you’ve done the research and know you need $40K to:
But where will you get it? You don’t come from a wealthy family, and your community connections will barely get you to $10K, much less $40K. After all, even Steve Jobs was making hundreds of calls a day from his garage just to land $50K. You’re willing to do it, but shouldn’t there be a better way?
Creators (which you may know as influencers) and makers (that is, artists and craftspeople) are the creative engine of the economy. With $10K at the right time, a creator could:
High-engagement creators can earn more than $140K per year.
The key benefit of selling shares in yourself is simple: you get access to capital when you need it, based on your potential to be successful.
For investors, the benefits of investing directly in individuals are manifold:
Investors are betting that the person will succeed, even if their venture doesn’t.
Interested in investing in Chisos, and getting exposure to our portfolio of entrepreneurs? For accredited investors, we’re currently raising our Fund II. Explore the opportunity and make a commitment via our self-service investment portal.
Our primary method of investing directly in individuals is via the Convertible Income Share Agreement, a novel approach designed by our leadership team.
We sometimes describe it as the Friends & Family round, without the friends and family.
The CISA is designed with features like a salary floor, deferred payment periods, and equity clawbacks, to make sure that it’s a good fit for today’s founders. Plus, with our online application and streamlined, tech-enabled review process, you can skip the pain of pitching to Grandma.
If you’d like to continue the conversation, learn more about our approach, or simply connect with our team, contact us here.
We’re proud to be part of the conversation around investing directly in individuals. Our vision is to enable investment in entrepreneurs, founders, athletes, and creators at scale. We’ve been investing using the CISA for a few years now, and have gained a lot of insight through the process.
Together, we’ll democratize opportunity.