When a startup goes through a downround, things can be very painful. Typically a downround will impact the founders a lot more than the venture capital investors , but if your startup has venture debt then things could become even more difficult. So what happens to venture debt when a startup goes through a downround, and what can you do at your company to work through that happening?
Deposits are an important part of venture debt. It’s normal for part of the deal to require you send the lender, say, $20,000-$30,000. So why are deposits required by your lender when you sign a venture debt term sheet?
Off balance sheet items are usually spoken of in hushed tones when public companies crash and burn, usually in the haze of opaque financial disclosures.
Compliance with regulatory requirements is crucial for the success of any business, but startups, with limited resources, need to be particularly careful.
The ultimate tax season guide for startups, by the leading tax CPA to startups. Kruze has filed thousands of tax returns; we answer the top tax questions.
The ratio of distributions to paid-in capital (DPI) is used to measure the total capital that a venture capital fund has returned to its investors. It’s calculated by dividing the cumulative distributions by the amount of capital invested in a VC fund.
While startup founders can pay themselves through an LLC, the Internal Revenue Service (IRS) doesn’t particularly like it. If you’re a founder considering this option, you should know that you may get extra attention from the IRS.
With this question, there are different factors at play. There’s what we recommend and there is also what happens in reality when founders are busy and end up resorting to the quickest method.
Insured Cash Sweep (ICS) accounts have been around for a while, but the recent Silicon Valley Bank (SVB) crisis has made a lot of founders look more closely at this banking option for their startups.
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