{"id":170,"date":"2017-11-16T11:43:03","date_gmt":"2017-11-16T11:43:03","guid":{"rendered":"https:\/\/blog3.indifi.com\/?p=170"},"modified":"2024-10-28T06:49:29","modified_gmt":"2024-10-28T06:49:29","slug":"alternate-using-equity-to-finance-working-capital","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/alternate-using-equity-to-finance-working-capital\/","title":{"rendered":"Using Your Equity To Finance Working Capital? Here\u2019s A Better Alternative."},"content":{"rendered":"
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Using your equity to finance working capital? Here\u2019s a better alternative<\/em><\/figcaption><\/figure><\/div>\n\n\n

As a B2B startup, using your equity cash to fund your working capital constrains your growth. Working capital is a short-term need\u200a\u2014\u200ause short-term debt financing for it. Read on to find out how.<\/p>\n\n\n\n

Picture this\u200a\u2014\u200aYou\u2019ve bootstrapped your B2B startup to a steady revenue run rate. Maybe you\u2019ve raised a round or two of equity funding to get here. It\u2019s now time for your next phase of growth. But more and more of your funds are getting stuck in working capital.<\/p>\n\n\n\n

Your early adopter clients paid you in advance (and partly funded your product development). But as you move beyond them, your payment cycles are getting longer. And before you know it, you\u2019re using your equity capital to pay your suppliers. And then your employees.<\/p>\n\n\n\n

In such a scenario, how to do you invest in product development\u200a\u2014\u200athat\u2019s your true engine of growth!<\/p>\n\n\n\n

I\u2019ve seen this play out scores of times, during my 10+ years in venture investing (at Canaan Partners, and as a founding member of the Indian Angel Network).<\/p>\n\n\n\n

Also Read: Five Ways Working Capital Loans Can Work For Your Business<\/a><\/p>\n\n\n\n

Small Working Capital Loan<\/a><\/div>\n\n\n\n
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