Why is debt financing more complex than equity financing? What are the key challenges in the debt financing process? How can companies determine their capital strategy and their ideal mix of debt and equity? What should companies look for in their partnership with capital providers? How can startups navigate various debt options and the world of debt capital markets?
In this 35-minute interview, hosted by Mosaic Director of Content Joe Michalowski, Finley Co-Founder and CEO Jeremy Tsui explains the "spiky process" of raising debt capital. He explains the differences between debt and equity financing and discusses capital strategies that startups can adopt to gain a competitive advantage.
To watch the interview, check out the link below:
What you'll learn
- (1:43) What the debate on debt versus equity is, and why capital strategy is important for startup founders
- (2:57) Why debt has not received much attention
- (4:53) What the challenges to debt financing are, especially for companies at the seed stage
- (6:08) What challenges to debt financing persist even for more mature companies
- (7:46) When a company should pursue debt financing rather than equity financing
- (9:24) What to look for in a capital provider
- (10:53) How a company can determine the right mix of debt and equity financing, and how trends in the debt capital landscape have shifted
- (14:19) What the first step to evaluating debt options is, and how consultants or in-house expertise can help
- (15:48) An example of what a complete debt raise process could look like
- (18:43) How founders and finance leaders should look at different types of lenders and debt
- (21:03) What the two main types of debt are for founders, and how their uses differ
- (23:16) Why there are more regulations and restrictions on asset-backed debt versus venture debt
- (24:42) Examples of companies that need asset-backed debt, and how debt is being used more prevalently
- (26:27) Why debt is more complex than equity
- (27:35) Why rules and legal regulations are necessary in a startup's relationship with a capital provider
- (29:27) How Finley helps finance teams streamline and centralize their interactions with lenders
- (32:02) Jeremy talks about one thing he wishes he knew at the start of his career
About Jeremy Tsui and Mosaic
Jeremy Tsui is the Co-Founder and CEO of Finley, a debt capital software platform. He was previously in the Merchant Banking Division at Goldman Sachs, where he made investments in software, real estate, and other companies. Prior to Goldman Sachs, Jeremy was at Oliver Wyman, where he specialized in financial analysis, scenario modeling, and stress testing for major banks. Jeremy also loves side hustles: he has launched a secondhand bike shop, a chain of escape rooms, and an Instagram museum. He graduated from the University of Texas.
Mosaic is the first strategic finance platform that sits at the center of the CFO tech stack, providing real-time Analytics and Planning that helps finance teams get from data to decision faster and empowers finance leaders to make more profitable decisions.
Want to learn more about Finley?
Finley is debt capital management software that helps high-growth startups save time and money by automating routine credit facility management tasks. Today, Finley manages over $2 billion in debt capital for high-growth fintechs like Ramp, Parafin, and Arc. If you're interested in learning more about software that can help you streamline your debt capital raise and management, just schedule a demo or take a self-guided product tour of Finley. We'd love to chat!