Should I consider debt financing options?

Published in
March 9, 2023

Check out our twelfth video in the series of 1-minute tips for startup founders from Alexander Konoplyasty, co-founder of Flashpoint Venture Capital.

❓Should I consider debt financing options?
👉If you are, as a founder, exploring debt options to fund your company, this video will answer some questions.

In the current tough equity market environment, the founders are more often faced with options to take on debt. It could come in various forms – revenue financing, venture debt, working capital or revolver debt, government grants, etc. Things to bear in mind – you don’t want to take too much debt vs your revenue that you might not be able to repay. Look out for monthly debt costs and hidden tricks, like commissions, the timing of interest payments, etc. Try avoiding covenants that restrict your work. The grace period on amortisation, if any, might be important for you. Various lenders might ask for various types of pledges, it is not unusual. Try using extra debt for raising extra equity, some lenders require that, VCs might also be comfortable that the company is better funded.

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