Debt is Coming

Speculative investment, with ambitious but inexact expectations of financial return, is important fuel for founders who build the unknown future. However, investors and operators are often deeply misaligned: investors think in bets, while operators think in consequences. The relationship is tense, but can be explosively productive.

Debt can also scare off growth equity funds, who don’t like not being the most senior money in the pref stack.

People on the outside sometimes wonder why businesses with so few traditional assets seem to require so much financing. Well, they  are  accumulating assets: users are the new assets, and their  use  is what you’re out to monetize.Whatever your business model is, acquiring users is the new building factories. 

As a founder, the most valuable optionality you have is the equity you haven’t sold, and the dilution you haven’t taken. But the second most valuable optionality you can have is a valuation that’s not too high.