The comments here seem to forget that financing is ESSENTIAL to startups - even profitable ones.
As a reminder, 99% of the marketcap (value) of a startup is its growth, not its present size/revenue/etc. By mathematical definition, a startup cannot fund fast-enough growth on current profits and therefore requires financing and a lot of it.
You finance a startup with a mix of VC and debt. As the business becomes less speculative ($MMs in revenue) debt becomes more available, and is generally preferable to equity deals for a number of reasons including dilution, board control, etc.
Unclear to me if VC financing availability is disconnected from debt financing, as the blog author seems to imply: when the world tightens, I think it tightens.
source: 30 years of this nonsense spanning multiple booms and recessions.
As a reminder, 99% of the marketcap (value) of a startup is its growth, not its present size/revenue/etc. By mathematical definition, a startup cannot fund fast-enough growth on current profits and therefore requires financing and a lot of it.
You finance a startup with a mix of VC and debt. As the business becomes less speculative ($MMs in revenue) debt becomes more available, and is generally preferable to equity deals for a number of reasons including dilution, board control, etc.
Unclear to me if VC financing availability is disconnected from debt financing, as the blog author seems to imply: when the world tightens, I think it tightens.
source: 30 years of this nonsense spanning multiple booms and recessions.