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You're totally right about VC obligations ... but that burden exists with any kind of financing. Let's suppose my grocery store guy has a $300,000 loan from Ban
by GCA10 11y ago
You're totally right about VC obligations ... but that burden exists with any kind of financing. Let's suppose my grocery store guy has a $300,000 loan from Bank of America, with interest due every month. He needs to meet payroll, buy his supplies and service his debt. He's getting sweated by his financial backers just as much. Maybe more so.
- chetanahuja 11y agoA bank loan doesn't come with board seats a large equity stake in your company and is not premised on fast growth of the existing business. If the business owner decides that the current size of the business is just right to keep everyone in the company employed and make the loan payments, they're good. A VC backed company doesn't have that option. TL;DR VC capital is very very different from a bank loan.