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.
-
Because you’d rather follow on investments dilute yours than destroy them. I’d argue that vc’s desire for multiple founders is a similar calculation. Debt, unlike equity, can cause catastrophe, but to say there’s no place for it in startups is a head scratcher.
The portfolio effect should make me *want* founders to make risky moves like taking venture debt.
-
-
I disagree and you do too. Debt adds great risk without great upside. Follow on equity investments de-risk while maintain or increase upside. Suppose you're investing in Facebook and you see it's going really well and Zuckerberg says he wants to take on some debt.
-
As an investor, you know that if he takes on debt, there's a chance your investment goes to zero. If he takes on more equity you get $750 million instead of a billion.
- Show replies
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.