It is hard for me to argue this with you, because I agree that 6% is a steep price to pay for any favor, be it an interest-free unsecured loan or a $20k seed investment.
But that's a subjective point.
What's not subjective is that an interest-free unsecured loan for $32k USD IS a favor, not a mugging, and while I don't think it's worth 6%, or even 1%, it's not right for me to accuse the offerer of that loan of mendacity.
A question I'd put back to you:
Assume that there is no seed fund or accelerator program you can get to accept you, other than this one. Assume that you need the $32k; stipulate that you cannot, say, bootstrap or consult your way out of the first 6 months living expenses.
Would you advise someone not to start a company instead of accepting this deal?
Your question highlights the fundamental problem. All the hype about acquisitions of young startups, funded by seed programs, has created some sort of widely held belief that you have to participate in an accelerator to launch a startup.
It's also causing investors to be more aggressive in pushing their money on startups, whether they need it or not. Inexperienced startup founders will mistake their fervor as an indication that they should take the money, instead of an indication that maybe their startup has real potential and they should be slower to give part of it away.
"Would you advise someone not to start a company instead of accepting this deal?"
That's a false dichotomy. There are plenty of companies (ours, 37signals, etc) that started without any funding at all. Then when we decided to raise funding (debt in our case), it was easy to get because we had real revenue and clear growth. It made sense for the bank to loan money to us because it could see we that we were going to pay it back.
Let's all stop spreading this bizarre myth that you have to take part in an accelerator to start a company.
If you ask, you'll find that there are few on HN louder and more obnoxious about skipping external funding than me. We bootstrapped in 2005. Not getting funding: best thing that ever happened to us.
But it's one thing to have it in for all seed funding programs (I'm with you on that!) and another to call one specific one "muggers" because you particularly don't like their terms. At least, not with terms like these.
Finally, just out of curiosity: is your $162k debt financing secured solely with your corporation? You didn't have to provide any collateral, or any personal guarantees? Obviously: I don't think you could pull that off in the US. Unless your revenues are way higher than I assume they are (my current assumption is already pretty high).
But that's a subjective point.
What's not subjective is that an interest-free unsecured loan for $32k USD IS a favor, not a mugging, and while I don't think it's worth 6%, or even 1%, it's not right for me to accuse the offerer of that loan of mendacity.
A question I'd put back to you:
Assume that there is no seed fund or accelerator program you can get to accept you, other than this one. Assume that you need the $32k; stipulate that you cannot, say, bootstrap or consult your way out of the first 6 months living expenses.
Would you advise someone not to start a company instead of accepting this deal?