Airbnb, Uber, Didi and Spotify have all made headlines of late by raising enormous debt rounds.
This has served to stimulate the thinking of first-time founders in particular: When is debt the right funding solution and should my company use it?
Let me assuage any fears.
When starting a company and seeking that first customer, you re not meant to take on a $1 billion debt financing and the accompanying terms/bells and whistles anytime soon.
If used in the right situations and for the right kinds of companies, venture debt is the perfect tool for raising growth capital while avoiding dilution and maximizing the potential financial return of the equity already invested in the business.
It is also a very timely tool to finance acquisitions.