What is Debt Financing

Insights on venture debt.

The Risks of a Personal Guarantee Agreement

A final loan condition we wanted to cover is the use of personal guarantees in raising capital. A personal guarantee agreement isn’t something you’ll often find in the venture debt financing sphere, but you might be asked to sign one if you pursue other forms of financing. Specifically, bank loans and other lenders may require …Read More

Debt Covenants: Are They Right for Your SaaS Business?

There are many terms and financial mechanisms involved in venture debt financing, one of which is a debt covenant. This is one of the loan conditions you may be required to accept to receive venture debt financing. At first, this might give you pause — but a debt covenant is less of a risk to …Read More

Warrants: What They Are and Why They’re Risky

A warrant (also called an equity kicker) is a security that grants a lender the right to buy stock in a company for a fixed price until a preset expiration date. Warrants are typically provided as an incentive to investors in exchange for their investment; however, depending on the lender, they may also be a …Read More

Warrants, Covenants, and Guarantees: Understanding These Important Loan Conditions

Venture debt financing is one of the most flexible, founder-empowering forms of SaaS funding available on the market. While a number of other options are available, debt financing stands above the rest when it comes to keeping founders and owners operationally and strategically free. However, while debt financing allows borrowers to maintain complete ownership of …Read More

Why Debt is the Flexible Financing Growing SaaS Companies Need

We Know, Debt Doesn’t Sound “Flexible” We all know what debt is: money that is lent and must be repaid with interest. But in terms of debt as a funding model for growing SaaS companies, it’s actually quite flexible for many reasons. When compared to other models that require collateral (that online software-based companies typically …Read More

The Venture Capital Success Rate for Startups

TL;DR: It’s Low Starting a SaaS or technology business is hard enough. You have to come up with an idea and establish the company itself. You have to identify and research the market need for that idea. And then you have to build it up to a useful, functional form, even piloting it with only …Read More

The Risks of Venture Capital Funding for Growing SaaS Companies

Venture Capital Can Pose a Productivity Challenge While venture capital funding (along with other models) provides resources that allow you to make improvements or changes, it’s not guaranteed that your SaaS business will become more productive as a result. In fact, raising venture capital funding can often have the reverse effect: when those funds come …Read More

What You Should Know About Raising Venture Capital

SaaS business owners are often drawn to venture capital investors without considering other funding options. There are a number of reasons for this. The sheer popularity of venture capital, the perception that VC funding will make a company successful, the higher appetite for risk, and so on. In the end, SaaS owners are trading important …Read More

Understanding the Risk of Debt Financing

Do the Benefits Outweigh the Risks? There are many benefits of debt financing. Staying in control of your business’ day-to-day operations as well as its long-term goals. Regaining control of your business if equity is already in employees’ or investors’ hands. Extending your cash runway between fundraising rounds. Supplementing an existing strong cash flow to …Read More

Three Flexible Debt Financing Advantages for SaaS Companies

We recently explored four strategic reasons why companies take on debt as opposed to other forms of financing, like equity financing or bank loans, debt financing provides a financial foundation for SaaS companies to achieve certain goals. These were situational and relative to where SaaS companies stood in their growth journey. Here, we’ll explore three …Read More