The only problem with the model is that it's cyclical and the revenue only comes through quarterly (based on the standard payment plan).
If during a particular 3 months window we see user growth that exceeds the existing income stream, we'll need to dip into the coffers.
Noting that the user provides a 30% deposit, IOU has to front up the remaining 70% for each user.
Assuming we use 60% of the war chest ($30 million) and keep the remaining as a buffer or to increase prepaid inventory stock, that allows us to support ~428.5k users from day dot before we run out of finances.
If all of these users were to provide a modest 2% growth on the investment of $30 million in the first three months, that only leaves us with $600k (enough for another 8.5k users) to expand the user base beyond this maximum limit before we need to find another source of growth capital (this is assuming absolute worst case scenario of max repayment length and minimum return values).
Exponential growth is to be expected in a business like this and as soon as we see a glimpse of that growth we can expect a large level of interest to finance IOU's activities either through credit raise, investment or bank support.
Fact of the matter is we have enough capital to cover any teething issues or more linear growth in the short-term and as stated multiple times by @kevin103 we can not afford to forget the revenue from prepaid inventories, now supercharged by the extra capital.
All IMHO, DYOR and not financial advice, just back-of-envelope numbers
IOU Price at posting:
44.0¢ Sentiment: Buy Disclosure: Held
