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Financing a startup with debt is usually a stupid move. Why? Isn't that better than giving away equity, assuming that you actually believe your company will re
by averiosus 11y ago
Financing a startup with debt is usually a stupid move.
Why? Isn't that better than giving away equity, assuming that you actually believe your company will reach multi-billions in valuation in the future?
- Spooky23 11y agoDebt is a bond, and your creditors have priority for payment. Creditors generally adopt a "FU, pay me". So you end up burning hard cash to make your payments + interest. An equity investor theoretically has an interest in the enterprise actually succeeding.