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Series A Crunch: Revenue vs. Equity

Posted on Monday, Jan 14th 2013

Do you understand the impact of infusing cash into your business? You do, right?

Cash comes in multiple forms: Revenues, Equity, Debt, etc.

Revenues = Validation, Sustainability, and potentially, also, fundability, although there are other factors involved as well. Revenues also enhance valuation.

Equity = Dilution. Good quality equity – smart money – can add to valuation, sustainability, and all that good stuff.

Debt = You have to service it and pay it back, unless the debt is convertible to equity.

However, in the early stages, the most robust form of cash that you can bring into the company is revenue. Especially because it comes along with customer validation.

Note: customers often advance money if you are solving a real problem.

 

This segment is a part in the series : Series A Crunch

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