Debt financing is usually massively cheaper than equity financing. If you need working capital and can pay back loans with decent terms, then you should almost

Debt financing is usually massively cheaper than equity financing. If you need working capital and can pay back loans with decent terms, then you should almost always prefer debt. I could be wrong, but I get the impression startups either don't understand how to leverage debt or it's just not sexy. No one gets a TechCrunch article written about their new 500k loan from Wells Fargo that they need for working capital. VCs aren't exactly keen on revenue producing startups going to a bank instead of them either. Another possibility could be they are no where near to producing the revenue needed to make payments or pay off a loan and equity has no hard deadline or immediate revenue requirements. Unfortunately, that's kind of a terrible cycle as a company with cheap debt and revenue is likely to be built on better fundamentals than one that has no idea when it will have revenue.