Share0
Tweet0
Share0
Share0
Tweet0
Share0

Will it ruin my chances of getting funded to take my startup into minor debt with a credit card or loan?

Long story short, I’m just starting a raise now, but my cofounder and I need to draw some kind of salary – around $2000/month would be doable – for the time being. We’ve been working hard on the company for a year, and have investors interested, but we need a month or two of extra runway to pay the bills until we close the round (by thanksgiving). To be clear, it’s just the two of us, and we are only trying to pay ourselves enough to cover basic living expenses in this pretty expensive city.

We could open a line of credit or take out a small business loan or we could try to find part time gigs. I’m worried that because the period of time is so short the time and effort put into going part time work on something else when finding funding is such a time intensive job might not be worth it, but if it would really undermine our funding case, then of course we will do it.

I have relationships with a few of the investors in our round such that I can ask their opionons, but we’ll also need other investors, so I thought I’d ask here to get more opinions.

Thank you!

  • If your debt is lower than 20K, I wouldn’t worry about it, after all when you get funded, its not like the whole loan will be paid off, a portion can be held and you just pay interest on it.

    If course it would also depend on the amount you’re seeking. Its all relative but I wouldn’t worry about a month or two.

    Now saying that, it NEVER is a month or two when it comes to fund-raising. Plan on at least 6 months.

    Reply

  • I would advise you to try and find other source of money until you get funded. Maybe one of you can get a small gig for 4k and split it so you can survive till you finalize your round.

    And it is never a month or two! you need to know that paper work and stuff like that could take a lot of time.

    so focus on the start up and keep it going, try to find some “love money” from family and friends, and see if you can get a side gig to work on ( not a very long and hard thing, that could potentially make you lose focus on your main goal: your startup )

    good luck!

    Reply

  • In the past 18 months i have had to apply for 4 credit cards to keep my start up afloat. At the time I applied for my last card, it was clear my credit rating was now completely shot. At the time I had less than 10k a month in revenue and was now up to 60k+ in debt. As of yesterday we hit 50k+ for the month 🙂 I’m paying off 2k a month in credit card debt. It depends on your experience, and level of confidence in your business. Not saying I did the right thing, but I’m hoping it’s not in vain…

    Reply

  • … [Trackback]

    […] Find More to that Topic: startupsanonymous.com/question/will-ruin-chances-getting-funded-take-startup-minor-debt-credit-card-loan/ […]

    Reply

  • … [Trackback]

    […] Information on that Topic: startupsanonymous.com/question/will-ruin-chances-getting-funded-take-startup-minor-debt-credit-card-loan/ […]

    Reply

  • … [Trackback]

    […] Find More on on that Topic: startupsanonymous.com/question/will-ruin-chances-getting-funded-take-startup-minor-debt-credit-card-loan/ […]

    Reply
    • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

    You may also like

    >