Fundraising · Investors

Can a small business loan hurt a founders chances of getting additional funding?

Michele Bishop I'm stylist chasing a dream by building a start-up. I am searching for tech and C levels to join me.

Last updated on May 16th, 2018

Funding from investors, etc. Is it a negative?

Lee Hirsch President at Continental Busines Credit

May 16th, 2018

No, i do not believe so!

Dane Madsen Organizational and Operational Strategy Consultant

May 17th, 2018

In most cases, venture investors will ask/demand that the loans get converted to equity, depending on the source. If it is a bank, and it is for specific assets, then those are subject to different treatments. If it is from a quasi-investor who wants to be paid from a venture round, it is unusual that a VC will allow their money to be used to payback early money. Not always, but usually.

Alexandre Azevedo Early Stage Startup Mentor

May 16th, 2018

Hi, Michele!

Previous funding will become a minor issue for investors as long as you show them some traction. For now, concentrate on validating your business model hypothesis in the fastest and cheapest way and prove them it will be a success. Of course, use you current funding wisely.

If you can show them a glorious future, they won't put so much weigh in past issues.

Wish you success!

Alex