This Week in Startups Understanding non-dilutive fundraising options + Continuum Ag Founder Mitchell Hora | E1419
Mar 27, 2022
Mitchell Hora, Founder and CEO of Continuum Ag, is a multi-generation farmer passionate about regenerative agriculture. He discusses the innovative tool Topsoil that helps farmers enhance soil health and tackle carbon sequestration. The conversation also dives into the critical connection between soil wellness and personal health, promoting a holistic approach to both. Additionally, Hora highlights how innovative financing options can empower farmers and support sustainable practices in agriculture.
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Non-Dilutive Funding Explained
- Non-dilutive funding means money comes into a company without issuing shares, leaving the cap table unchanged.
- This can include grants, pre-orders, or advance payments for software.
Venture Debt Explained
- Venture debt, a common non-dilutive option, is a loan from banks specializing in startups, often accompanying equity rounds.
- It involves interest-only payments for a period, followed by principal, and may include warrants or covenants.
Venture Debt Caution
- Be cautious with venture debt, especially in down markets, as covenants can be dangerous.
- In hot markets, raising equity might be preferable over venture debt to avoid potential issues.