We launched back in March with an expensive hardware product. For the first wave of manufacturing we needed some financial outsource so we got a 300K USD loan from an individual. We have had a good amount of sales, and now in order to speed up the process of manufacturing and scale we need a big cheque from the VC's. Now the question is, will that loan be a negative point for us? Or they will look at the process and the time to cashflow-positivity? We need to return the loan 6 months from now.
The loan does impact the valuation of the entity; however, it does not stop the conversation with a potential investor. If the Company can cash flow the money to pay the debt and continue to build enterprise value at the same time, an investor will remain interested.
I have seen entities attempt to raise money just to pay off past debts and this is not attractive to an investor. Make sure you are building a company with value.
Feel free to schedule a call if you would like to discuss further.
Answered 8 years ago
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