When Is Convertible Debt Preferable to Equity Financing a Startup

5min Business

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In Chapter 10 of 20 software entrepreneur Dan Street shares why he chose to raise convertible debt financing over equity. He shares the pros and cons of each. Convertible debt benefits include structure flexibility and faster time to close. Convertible debt does not provide investor assurance they will own a piece of the company. Street notes the next time he approaches fundraising he would be more open going the equity route. Street is the founder and CEO of Borrowed Sugar.