alt Hacker NewsThis is a crazy take. If you can raise on good terms (or better) then it almost always beats debt. Debt can make it a lot harder to raise or take on more debt in the future.
They're profitable, they are going to get the best terms possible at this moment.
Replies
missedthecue • today at 6:13 PM
But if they're just scaling inventory, debt makes way more sense because they payoff is almost instant as soon as they fulfill the order to the customer. I agree the math is hazier when you're talking about massive capex, growing headcount, or other longer-horizon capital commitments. But if they just need to buy inputs to sell output to complete an order backlog, selling a portion of the company seems odd.
They can likely fund the purchase orders for 10% while they grow. Sounds cheaper than giving away a percent of all future profits. This is very common.