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What's the rationale for the "no debt" condition? Basically, if a company's revenues are greater than its spending, it is profitable. It doesn't matter if the
by nandemo 17y ago
What's the rationale for the "no debt" condition?
Basically, if a company's revenues are greater than its spending, it is profitable. It doesn't matter if the company hasn't eliminated debt or hasn't recouped the initial investment yet: being profitable means that it's being successful at getting at either of those goals.
- deleted 17y ago[deleted]
- babyshake 17y ago"No debt" really means not enough debt so that you don't own a super-majority of equity. Giving away a few percentage points for enough cash to keep the lights on is fine. But I've seen arrangements where founders didn't end up owning their companies, even after an ostensible "seed stage" round.
- nandemo 17y agoI cannot make sense of your comment. How does having debt decreases your share of equity?
- enjo 17y agoI'm assuming it's more along the lines of 'no personal debt'. Many single founders, as they typically have trouble finding funding, find themselves taking on personal debt to fund the business.