Ben Gilbert: commitment

Transcript context

…The book value of equity. Right. Your total assets minus your total liabilities is your equity. In many cases, you can squint at this if you don't have a lot of liabilities or a lot of debt on your books and say, okay, so it's basically the cash in the bank. The assets you have on hand is your equity. What this banker is basically saying to Phil Knight is, I will only loan you up to the amount of money that I already know you have. That's not terribly helpful. It's basically a cash advance. It's like, well, the money that I have is tied up in other stuff, like inventory. You're just loaning me enough money for me to make my next order, but there's not actually any real new capital. It's not like there's a post money valuation. You're basically just saying, you can borrow these dollars, then you can give them back to me, and I'm going to cap your dollar limit super low. Yeah, it's basically factoring. It's what it's known as today.…

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