I’m considering whether to borrow or open up for investment for my startup. Thoughts?

Chris Barsness, Lead experience getting startups off the ground…

It has been tough to raise capital the last few years and debt can be cheaper; however, it is most certain any reasonable investor will want personal guarantees and serious collateral, such as a lien against your home and any other assets.  

Be cautious because I have had many clients with what they thought was a solid business, got debt financing and hadn't even thought about the fact that they signed personal guarantees with collateral.  They think they can just file BK on the company and walk away.  It doesn't work that way.  I would try to see if you can get angel investor(s) to go with preferred equity or sometimes properly structured convertible debt can be a little less risky.

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