Debt Financing

Debt financing involves borrowing capital rather than selling ownership. This article explores the mechanics of debt, the trade-offs with equity, and the risks of leverage.

A loan covenant is a rule attached to debt financing. This article explains the types of covenants, financial ratios, and the consequences of tripping a technical default.

Venture debt is a loan for VC-backed startups used to extend runway and minimize dilution. It serves as complementary financing to equity but comes with repayment obligations.

An honest look at credit facilities, defining how these flexible financial agreements work and distinguishing them from traditional term loans for startup founders managing working capital.

An LBO uses significant borrowed money to acquire a company. It maximizes returns on equity but adds substantial risk through heavy debt obligations and interest payments.

This guide defines promissory notes for founders, detailing their legal structure, the difference between standard and convertible notes, and strategic uses in early-stage financing.