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You need the money to scale sales operations to the level of revenue.

• nemothekid 7y ago
  Right, but if you were profitable and, I’m assuming the reason you needed the money was sound; you’d have to be incredibly unlucky if the only outside capital you could raise was a down round. You usually only hear downrounds from companies that are struggling to keep the lights on
  • ec109685 7y ago
    Selling equity dilutes, whether it is an up or down round. That sold equity is potential appreciation that the firm selling won’t participate in. With debt, you promise a fixed rate of return instead, so the benefits are capped for the purchaser.