Credit & Debt
What this is: Non‑dilutive capital with fixed obligations (venture debt, LOC, term loans). When to use: Predictable revenue, inventory cycles, or to extend runway after equity. When to avoid: Pre‑revenue; volatile cash flows; tight covenants.
Tools & Structures
Venture debt
Loan sized to equity raised; warrants; covenants; extends runway.
Bank LOC / Term Loan
Working‑capital and capex lines; collateral and guarantees common.
Asset‑backed / Inventory
Tied to AR/inventory; aligns with e‑commerce/manufacturing cycles.
Key levers: Covenants, availability, warrants, prepayment penalties, MAC clauses.
Case studies: Mailchimp (bank lines), Inogen (royalty-based facility).
Related: See Structured & Hybrid Equity for revenue-based financing, and Evaluating Capital for cost analysis.
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