Subject: How to pay for initially developing free software
From: John Gilmore <gnu@toad.com>
Date: Mon, 09 Mar 1998 21:10:06 -0800

It has been claimed that investors won't support the writing of new
free software.  Here's a model in which they do:

	*  support pre-existing free software
	*  grow your revenues and profits; make your company worth a lot more
	*  sell part of your company to investors
	*  use some of the investment to write brand new free software
	*  lather, rinse, repeat.

So far, this model appears to be working for Cygnus, which is in the
"use some of the investment" stage.

The difference between this and the oft-cited "nobody will invest in a
NEW company to write free software" situation is that the company
already has a track record of wringing profits and growth out of free
software.

This might be a lower-key parallel to a model used by a few people,
e.g. Jobs and Shugart: Want investors to finance your new strange
business idea?  Arrange for your previous business to make its
investors 10x the money they put in...

	John