From a Founder’s Perspective: What is Out There if You Don’t Want to Dilute?

Discover alternative fundraising strategies and non-dilutive capital options to scale your business without giving up equity from a founder's perspective.

Key takeaways
  • Dilution is not a bad thing: Denis Mosolov, managing partner of Flashpoint, a venture debt firm, highlights that dilution is not a bad thing, especially in today’s market where equity is expensive.
  • Non-dilutive capital: Mosolov emphasizes the importance of non-dilutive capital, such as venture debt, which can help companies scale without giving up equity.
  • Alternative options for fundraising: He suggests alternative options for fundraising, including revenue financing, factoring, and government subsidies.
  • Seed and series A rounds increasingly difficult: Mosolov notes that seed and series A rounds are becoming increasingly difficult to raise, especially for companies that are not VC-backed.
  • Risk of down rounds: He warns that companies may face the risk of down rounds if they don’t raise capital fast enough.
  • Cash is becoming scarcer: Mosolov observes that cash is becoming scarcer, especially for private markets, and that investors are becoming more cautious.
  • Economic instability: He attributes this trend to economic instability, which is causing investors to become more risk-averse.
  • Shifting from equity to debt: The speaker notes that some investors are shifting from equity to debt, which can be beneficial for companies that want to avoid dilution.
  • Government support: Mosolov highlights the importance of government support, including subsidies and programs, which can provide non-dilutive capital to companies.
  • The importance of founder-friendly fundraising: He emphasizes the importance of founder-friendly fundraising, which involves raising capital in a way that does not compromise the company’s vision or culture.
  • The challenges of raising venture debt: Mosolov notes that raising venture debt can be challenging, especially for companies that are not VC-backed or have not yet scaled.
  • The benefits of venture debt: He highlights the benefits of venture debt, including the ability to avoid equity dilution and access non-dilutive capital.
  • The growth of venture debt: Mosolov observes that venture debt is becoming increasingly popular, with many companies opting for debt financing over equity financing.