Venture Debt vs Equity: Dilution and Founders' Value at Exit
This lesson is part of the course
In this lesson
You compare raising USD 4 million as equity with taking it as venture debt with warrants: new shares, the founders' fully diluted stake, their value at exit and the exit value where both choices are equal.
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Lessons in this course
- Term Sheet Basics: Draw, Interest-Only, Amortisation & Runway Extension (Chart) Locked
- Warrant Coverage: From % of the Loan to Number of Warrants Locked
- Effective Cost: Stated Rate vs All-in Cost with Fees Locked
- Lender Returns: Final Payment, Warrant Value & XIRR Locked
- Venture Debt vs Equity: Dilution and Founders' Value at Exit Locked
- Covenants & MAC Risk: Testing a Minimum-Cash Covenant Locked
- RBF vs Venture Debt vs Equity: Which Is Cheapest at Which Exit? (Chart) Locked
- Default & Restructuring: Claim, Recovery Scenarios and Expected Value Locked