Venture debt is like a delicious sandwich that only costs ten cents, but occasionally explodes in your face. If I were running a startup, I don't think I'd ever take it.
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Sorry but what are the risks? Intuitively it is money without dilution. Do you mean the risk of bankruptcy by non payment? But that only happen when you're broke anyway?
What you said. Yes, risk of bankruptcy by non-payment. It can happen much more easily than you think.
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That makes sense of course, but won't the time you cant pay interest be the same time you run out of money anyway just a month earlier?
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Good question. To be honest, I'm not sure. I've never been in that position thankfully. With that said, I would say that: Obligations to vendors can often be extended out and employees can be laid off and sometimes will work without pay. The bank however has you by the balls.
End of conversation
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