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Genuienly curious as a fairly young person, 26, of how common loans have been in the startup community up to this point? I can't imagine that business loans ha
by jbhatab 10y ago
Genuienly curious as a fairly young person, 26, of how common loans have been in the startup community up to this point?
I can't imagine that business loans have been avoided up to this point. 100% could be wrong though.
Also isn't debt equity fairly popular which has a lot less equity attachments and is almost like a glorified loan? This one I'm much less sure about.
- epa 10y agoAny debt is typically done early on for seed level amounts and has convertible features - converting at the next funding round. We are seeing more leveraged buy outs recently.
- wpietri 10y agoI don't hear much in the way of loans. Why would anybody loan money to a business that's losing lots of money and has no assets that could be resold? Convertible debt is much more like equity than a loan. The easy way to think of it is, "The investor will give us some money, but we'll figure out how much of the company they're getting later." Just selling equity early on is a pain, because the valuation is entirely made up. Being able to defer the question until more data is in works out better for everybody.