Don't buy something, especially something with an ongoing or operations component, from someone you don't trust. I think J.P. Morgan's famous quote is instructive.
There's nothing wrong with using long-term (perpetual is very long term) liability to finance growth. That's what happens when you sell equity in a start-up -- it's dead anyway if you can't launch, so that you'll eventually be paying dividends to shareholders (or otherwise returning capital to them) is often a reasonable trade. Financing early customers the same way makes sense; if you have to sell a unit of product now at a perpetual loss, you can compute the lifetime cost of that; for instance, giving pg a free lifetime email account ($500/yr) if that brings you 10k customers at $500/yr is probably a worthwhile strategy for a new high-end email hosting service.
Don't buy something, especially something with an ongoing or operations component, from someone you don't trust. I think J.P. Morgan's famous quote is instructive.
There's nothing wrong with using long-term (perpetual is very long term) liability to finance growth. That's what happens when you sell equity in a start-up -- it's dead anyway if you can't launch, so that you'll eventually be paying dividends to shareholders (or otherwise returning capital to them) is often a reasonable trade. Financing early customers the same way makes sense; if you have to sell a unit of product now at a perpetual loss, you can compute the lifetime cost of that; for instance, giving pg a free lifetime email account ($500/yr) if that brings you 10k customers at $500/yr is probably a worthwhile strategy for a new high-end email hosting service.