1 0 2009-03-19T11:11:31-04:00 <p><ol> <li>&nbsp;Unprofitable and small companies cannot usually access debt. Certainly not in the same amounts as they can with equity.&nbsp; </li> <li>Investors get in for one simple reason - to get out at a profit. Low valuations going in compensate for the risk that an investor may not get out for a long time if ever. Given the exit environment these days, it is very uncertain how investors will get their money + a return back.&nbsp;</li> <li>Loss of IP: If you don't repay your debt, in the most extreme circumstance you can lose your whole business.</li> </ol></p> <p>IP is the most important asset a startup has and any smart lender will demand it as security.</p> 0 0 2009-03-19T11:11:31-04:00 86 1 live 2009-03-19T11:11:31-04:00 <p><ol> <li>&nbsp;Unprofitable and small companies cannot usually access debt. Certainly not in the same amounts as they can with equity.&nbsp; </li> <li>Investors get in for one simple reason - to get out at a profit. Low valuations going in compensate for the risk that an investor may not get out for a long time if ever. Given the exit environment these days, it is very uncertain how investors will get their money + a return back.&nbsp;</li> <li>Loss of IP: If you don't repay your debt, in the most extreme circumstance you can lose your whole business.</li> </ol></p> <p>IP is the most important asset a startup has and any smart lender will demand it as security.</p> 2010-02-14T15:17:48-05:00 http://startupcfo.ca/2009/03/venture-capital-vs-debt-can-you-compare.html 4 45