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๐Ÿ’ฒ Debt Vs. Equity ๐Ÿ’ฒ

๐Ÿ’ฒ Debt Vs. Equity ๐Ÿ’ฒ

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Should I be raising debt or should I be raising equity?

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Here is a simplified way to answer this for yourself >



Most entrepreneurs have asked me this question as they believe that the only difference is if they will be asked/ able to repay.

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The sad truth is โ€“

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If you donโ€™t think you will be able to repay, neither is right for you.


๐Ÿ‘‡๐Ÿผ Hereโ€™s the right way to think about it >


Ask yourself these questions >


๐Ÿ‘‰ What is the yield of making these investments? Can they be quantified today?

Yes > Consider Debt.

No > Consider Equity.


๐Ÿ‘‰ Is this being spent to create a market or better profit from it?

Create a market > Consider Equity.

Profit from it > Consider Debt.


๐Ÿ‘‰ Is there something more than capital you need โ€“ say strategic guidance?

No > Consider Debt.

Yes > Consider Equity.


๐Ÿ‘‰ Can you plan granularly how it will be expended & what the ROI is?

No > Consider Equity.

Yes > Consider Debt.


A good well-structured fund-raise always factors a healthy mix of both.

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Equity - to help build the market.

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Debt - to profit from it.



Remember, Equity is & will always be 2x more expensive than debt โ€“ just that you donโ€™t pay for it today.



#capital#CFO#finance#strategy#startups#funding#entrepreneurs#venturecapital#debt#privateequity

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