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Posted on: 02/06/2019

Joel Gragg of ORIX explains how fast growth stage startups use debt

Joel Gragg

Joel Gragg

Managing Director - ORIX


Joel Gragg of ORIX - Podcast Summary

Joel Gragg of ORIX discusses how growth stage startups use debt as part of their capital structure. Joel also talks about how greater predictability in startup revenue and customers unlocks more and more low-cost loans, enabling startups to fund their growth without giving up lots of equity.

Joel Gragg of ORIX - Podcast Transcript

Scott: Welcome to another Founders and Friends podcast. Scott Orn of Kruze Consulting. And before we get to a great interview with Joel Gragg of ORIX, a quick shout out to our sponsor, Brex. Brex is a virtual credit card for startups. They also give you physical credit cards if you want that, but I love the virtual aspect of it. It’s really easy to provision, give new employees. It’s great with monitoring their spend. There’s no personal guarantee from the founder. That is humongous. That’s probably the single biggest reason to use Brex. You don’t have to have your own personal livelihood on the line in case something happens to your company. There’s no personal guarantee. They also have some great integrations with QuickBooks, and they have good rewards. They’re startup-centric rewards, like ridesharing and travel and food delivery stuff. So check out Brex. If you go through the sign- up sheets, just put in Kruze, and I think you get a special offer. I’m not sure if it’s free cards or a discount. But you get something, so it’s worth doing. So, check out Brex, and on to the podcast with Joel. Thanks. Welcome to Founders and Friends podcast with Scott Orn at Kruze Consulting. My very special guest today is Joel Gragg of ORIX. Welcome, Joel.
Joel: Thanks, Scott. Glad to be here.
Scott: Yeah. We’ve been friends for a long time, probably like 10 years. Right?
Joel: For a while. I think we even had some of the same college friends.
Scott: We do. We do.
Joel: But we can skip that today.
Scott: I was just out to lunch with Glenn Evans, actually. Do you remember Glenn?
Joel: I do, yeah.
Scott: Yeah. Yeah, I was just out to lunch with him. So, Joel is a friend. He is… I don’t know what your exact title is, but you’re a partner or-
Joel: Managing Director at ORIX Growth Capital.
Scott: … Managing director at ORIX. Yeah. Maybe just start by retracing your career and explaining ORIX and some of the basics of venture debt. That’s a lot. Retrace the career first.
Joel: Yeah, we’ll take it in bite-sized chunks. Yeah, again, Joel Gragg with ORIX Growth Capital. I started doing this probably around the same time as Scott did, 17, 18 years ago. Started on the traditional commercial banking side, started out with Wells Fargo, was part of their analyst training class here in San Francisco. It was great. Not a lot of banks do it anymore, but it was like a six- month MBA in banking where all the analysts from around the country lived together here and basically got our MBA in banking-
Scott: That’s awesome.
Joel: … Learned the credit… Yeah, it was great. And when I came out, I certainly wasn’t doing tech lending. I think my first call was a ski resort, which was an interesting business.
Scott: Nice. That’s not, but-
Joel: No, not bad.
Scott: … You probably got to experience it a little bit.
Joel: Not bad. I got to wear the San Francisco gear, the vest, 17 years ago, so maybe I was the trendsetter. But no, started with commercial banking, ski resorts, [inaudible] franchisees, wheel manufacturers, and everything in between. Moved with Wells Fargo to Palo Alto area in mid- 2000s and got more exposure to technology. And about 10 years ago, moved to San Diego to go get my MBA in entrepreneurship. Yes, for everyone listening, the rumor is true. San Diego is not a bad place to live, so that was a great spot. Went down and got my MBA, and it was there where I was the first non-partner hired at a small mezzanine fund called Huntington Capital. Being the first non-partner, you’re quasi- CFO one day, you’re analyst one day, you’re board-observer one day. I mean, it’s just overall great experience. And when you’re with a small mezzanine fund, not like traditional buyout mezzanine fund where you’re adding a couple turns of leverage onto a big buyout, you’re really, it was an $ 80 million fund that we raised right at the thick of the financial crisis in 2008. You’re doing everything. We did $ 5, 000 common stock early Series A equity checks to the traditional-looking mezzanine and everything in between. But it was then where I got even more technology exposure through some of those equity investments, through some of those early stage software companies, and that’s where I touched tech even more, especially down the rung of the pyramid.
Scott: Well, you guys, I remember, talking… I met you after you [crosstalk].
Joel: Right when I moved back up, yeah.
Scott: Yeah, and you guys were doing so much creative stuff and you kind of went from one opposite to the other, super traditional…
Joel: Yeah, a super traditional bank in middle market banking in a box to you have a small $ 80 million fund. And, again, remember it was kind of in the crisis. Like I said, everything from direct equity to traditional mezzanine and everything in between. But again, great experience, great team, and we had our… I know you’re a recent father. Congratulations… But our first kid when we were down in San Diego and we made the choice to move back up to Northern California where I’m from and the network’s from and spend more time and completely focus on the technologies coming in. Again, throughout the, call it first 10 years, had touched technology but it was really six, seven years ago when we made the shift and when we moved back up here and solely focused on tech. Right before ORIX, I was leading the tech banking team here in San Francisco for Bridge Bank.
Scott: Oh, I didn’t know that. Okay.
Joel: Yeah, I was working with some folks-
Scott: Yeah, Letterman.
Joel: … That you know well, Mike Letterman and the team there and still worked closely with them. Then, three and a half years ago, met the group leader at ORIX, Jeff Bede. ORIX had a good, long name in the venture debt industry and they had some holes here on the West Coast and needed a senior guy here in the Bay Area. So, I joined and helped build up the team here and have been leading the efforts ever since.
Scott: That’s awesome. Yeah, you’ve had a good run. ORIX is, you said you’ve been around for a very long time. What’s ORIX’s capital base? Is it a traditional commercial bank?
Joel: Yeah. Without getting into the weeds, ORIX Corp is actually a publicly traded global finance company. We manage plus or minus 100 billion in assets across the globe. So, we’re a big finance company, but unlike Wells Fargo here, my early experience, we were a big organization but a more regulated bank entity, we are, in a sense, investing balance sheet capital for a non - regulated… Regulated in different ways, but a non- regulated non- bank entity here. So, there’s a number of different groups within ORIX that operate here in the U. S. Through ORIX USA. Growth Capital, which is where I sit, is one of those. To your point, we’ve put out… We’ve been doing it 16, 17 years. We’ve put out probably close to 2 billion here and 2 billion in capital and over 150 deals throughout that time. You know the capital base is important. The longevity in the market’s important.
Scott: Well, also, I asked that question because you touched on that really well where you said, “We’re a large financial institution but we’re not regulated in the same way that Wells Fargo’s regulated.” The reason why that’s important is because big large banks like Wells Fargo have a hard time doing tech lending because the regulators don’t understand it and it doesn’t look like traditional commercial debt. So maybe talk about… That allows you guys to do more interesting types of deals, more flexible types of deals.
Joel: Yeah. And you know, normally it’s the same for whether you’re talking about bank debt, even venture or growth equity. Normally, it’s a compliment. So, a bank, the banks that we know very well, I mentioned one, Bridge Bank, Silicon Valley Bank who obviously has a huge footprint in the market, Square One Bank. There’s a number of commercial banks that focus solely on this tech ecosystem that you and I are very involved and do a great job. They’ve continued to evolve their own platforms and increase their check sizes and build market share. But as a whole, the tech market, tech ecosystem, as you know, on the lending side has expanded. So, you have the banks. They’ve done a good job, but they also serve a niche. So, they may provide a venture loan, they may provide a working capital facility or a recurring revenue facility, but there’s only so much risk that they’re going to be able to take. So, where we come in is we’re not displacing equity. If a company needs $ 40 million to scale their business, that probably shouldn’t be done all in debt-
Scott: That’s really good… Let’s come back to that. Keep going. Yeah, that’s a really great point.
Joel: … At the early stage, and vice versa. Most companies aren’t going to … Depending upon their trajectory, growth, is that there may be a gap in terms of where the bank plays. So, again, it’s the difference between wearing an enterprise value lending hat, which is squarely where we sit, versus the banks being able to do some enterprise value lending but there’s always a stopping point in terms of the amount of risk that they’re able to take.
Scott: I want to come back to the enterprise value lending too, but not displacing equity real fast. I’ve had this experience many times in my career where maybe a company needs like $ 10 million in cash to hit the next set of milestones, and they’ll say,” Well, I’ll raise like six in equity and four in debt.” I think what I hear you saying is,” No, that’s not the right mix.” Maybe you can tell the audience what the right mix should be or how the company should think about that a little bit.
Joel: You know, the answer would vary depending upon stage and company lifecycle, right? So, when you think about the origins of venture debt, which your prior firm Lighthouse-
Scott: Did it for nine years. Yeah.
Joel: In your firm, you’re one of the pioneers, right?
Scott: Yeah.
Joel: But a lot of the early venture debt, whether it’s bank or the non - bank lenders, like where you sat, a lot of the underwriting was more about the investors, [inaudible] venture loan. It was more about the investors and the investor syndicate and them willing to support this earlier stage company. Right? If you rewind 10 years ago, the debt levels on those growth stage businesses were less than they are today.
Scott: Oh, interesting. I didn’t know that.
Joel: Right? 10 years ago, you sat across from a lot of CFOs and you had to really explain why and how debt fit into the capital stack, right? Today, when you look at the ecosystem and where debt plays a role, and especially where we play at that growth stage, I think it’s become more common practice and recognize that venture debt, growth debt, however you want to slice that cutoff, is a more accepted piece of the overall [crosstalk] stack.
Scott: Sure. Because the companies are more established, right? There’s real… Coming back to that enterprise value comment.
Joel: Exactly. Yeah, yeah, yeah. I was going to round that out with in terms of what’s that right mix, right? There are lots of rules of thumbs today out in the market on, well, if you’re a recurring revenue business, is one times debt to ARR the right number? It’s the right number for some companies. What’s your growth rate? What’re your margins? What’s your retention? So, it’s not a one size fits all, but I would say overall when you look at the landscape, there are more mature businesses. They have different business models than 10 years ago, right? More-
Scott: More predictability.
Joel: More predictability, more subscription base, more recurring, bigger maintenance streams, tech-enabled with repeatable customer bases. So, it’s a more accepted piece of the capital stack and as you move to the right, whether that’s 10 million in revenues, 15 million in revenues, all the way to pre- IPO, you’re able to look and say,” Hey, this is a predictable business. It’s doing 20, 30 million in sales. It has this sort of retention metrics.” Both the company and you as a lender are able to add in more leverage in terms of that overall capitalization. So maybe, rather than going and raising a $ 50 million equity round, it might be 30 million in equity and 20 million in debt. And just pare those ratios back if you’re talking about a Series A, Series B, earlier stage company. But I’d say in general, yeah, you’d probably want a little less leverage when you’re talking that true venture-ish venture loan, you’re taking venture risk. But as you move up the scale, I tell people probably 70, 80% of my job I’m wearing the similar hat as a growth equity investor would in terms of what metrics I’m looking at, what competitive customer base, but I’m a debt lender. So, my ultimate decision, I may be comfortable saying yes to a particular company, a particular deal that one of my growth equity friends might not because they might not see a path to 3X. For me, I might say,” Hey, that’s a great debt deal.” So, it works. It works for us and it works for the company to say,” I’ll take that capital and maybe that gets me to that transition from legacy to that SaaS transition and that $ 10 million that we do, or whatever capital that we provide,” gets them to that milestone.
Scott: I think you made… First of all, that was really good so we should cut that segment and put it on the website. The increased predictability has made lending so much easier. Not easier necessarily, but-
Joel: It has in a sense.
Scott: … More willing to do it in bigger dollar amounts. I think there’s something maybe you could talk… You talked about this a little bit but talk about that education of the venture capitalists and of the board members to understanding that. How have you done that? How has the industry done that? Because I think that’s another part of this, is they’re willing to take on a little bit more debt than they would’ve been 10 years ago because they understand it better.
Joel: Again, just rewind 10, 15 years ago. If you were to look at the top five most valuable companies in the world 10, 15 years ago, I don’t know. It was probably GE, Exxon Mobile, and a handful of others. Maybe Microsoft.
Scott: Industrial companies.
Joel: The industrial companies, blue-chip companies. You look today, and again, this is going to tie into that enterprise value lending comment. You and I know, and everybody who’s listening to this podcast knows that a $ 20 million AR business with those good metrics that we talked about that’s growing 50%, there’s inherent value in that.
Scott: Huge amount of value.
Joel: Maybe it’s not TEDx comp that the highest wire in the segment, but if it’s a $ 20 million AR business with good retention, with good margins that could, most aren’t, but that could turn the dial and get profitable if they wanted to and slow that growth rate, there’s a lot of enterprise value there. So, I think just… I kind of started from the top looking at the public markets, but if you even look at the public landscape today and look at Salesforce and Amazon and Workday and Facebook, who are the most valuable companies out there in the market today? It’s technology companies. There’s not a direct correlation and you could argue the public versus private premium, but in this private space that we play, I think everybody recognizes that these sorts of businesses, these sorts of model have value that goes beyond just cash flow, and as lenders that’s how we’ve gotten more comfortable around the table. People ask me how many times do you really have to have that debt conversation? Again, 10 years ago maybe it was half the time. Today it’s maybe 2% of the time. It’s more of just what is the flavor. Am I going to look to the left and get enough of what I need from the bank, or do I want to go one step further and bring in another partner like[inaudible] or others to give me a little bit more leverage? So, it’s less,” Do I need it in there?” It’s more of, What’s the right balance, and what’s the right time?
Scott: Yeah, that’s so cool. It’s so nice for you. I remember when I joined Lighthouse in 2002, we were in that terrible recession. Or, no. Yeah, 2002. Most VCs had taken any venture debt. They didn’t really understand it at all, so every conversation was super painful. Then, they kind of got educated, then the ‘08, 2009, 2010 recession they were fairly conversing but still some holes. It sounds like now, the equity world really understands what you’re trying to do and I think that’s really healthy because then everyone’s interests are aligned, there’s no miscommunication, they don’t ask you for too much debt, or-
Joel: Sometimes.
Scott: … Maybe they still do.
Joel: Yeah, again, depending on the stage of the company. I would say the levels of debt probably at that earlier stage hasn’t moved, the aperture hasn’t opened as much as in the growth stage. But it’s the same conversation on the equity side. You and I 10 years ago, a big growth round was a $ 30 million check and now that’s a Series B today. So, yeah -
Scott: We have companies getting preempted with $ 50 million checks when they’re really just basically a Series A company or what used to be a Series A company. So, it’s nuts.
Joel: And again, going back to the conversation we just had, in terms of not displacing equity, it’s not typically an either/ or, like I said, because if a company is going to spend on sales and marketing and product development and they’re going to burn 15, 20 million for the next two to three years as they’re scaling, that probably shouldn’t all be solved with debt, right?
Scott: Definitely. That’s what I was kind of fishing for, in that, I tell our clients, and our clients are earlier stage. They’re seed, Series A, Series B, some Series C. So, it’s really the Series A, Series B ones that we’re having this conversation with. I always tell them to raise as much equity as they need to hit the milestone and then take debt as the incremental-
Joel: The cushion.
Scott: … One- way extension. The cushion. Yeah. To me, that’s the smartest because you still are getting the benefit of the less dilutive not as expensive debt, but you’re not potentially short cutting yourself and putting yourself in a bad position a year from now.
Joel: Yeah. No, that’s a good way to look at it, is the earlier stage it’s, I would say, a little more of that runway extension definitely to that next round, and then again, as you move to the right you can almost look at it as growth capital cushion and cash is a little fungible, some of it’s equity, some of it’s what your billings and bookings as those become more meaningful. Are you collecting annual upfront and you have a big deferred revenue growth? But it’s a piece of that overall growth capital cushion.
Scott: Yeah, I think it’s really smart. That’s awesome. So, we’ve covered ORIX, we’ve covered your background. What are some of the differences… I guess we’ve covered the bank stuff a little bit, but at your stage, the later growth capital stage, where are you seeing the differences? Are the banks between you guys and ORIX? Excuse me, between you and the banks? Do the banks cap out at certain dollar amounts and they bring you into the deal, or it’s an either/ or like they pick you over the bank? How does that… Because you’re absolutely right. You’re operating in a zone that I rarely operated in at Lighthouse versus the later stage big huge checks. How does this all play out?
Joel: Yeah, it’s not always big, huge checks. We, ORIX Growth Capital, would go down to 5 million on the lower end to a 10, $ 15 million revenue company that has a good growth trajectory all the way up to pre- IPO financing. So yeah, the spectrum ranges. On the bank side, as I said, the names that we know that plan the ecosystem, they’ve done a great job. The banks have that natural funnel. Every company needs a bank, right? Not every company needs a non- bank venture lender. You’ve lived that, right?
Scott: Totally.
Joel: So, the banks have this natural funnel within the ecosystem when they see everything. Their check sizes have increased in terms of where we play, I would say, a majority of the time we are partnering where, because of the stage that we’re coming in, whether it’s 20 million in revenue, 30 million in revenue, that company’s already gone through that Series A, Series B, Series C financing. To our earlier discussion, they’ve already started to layer in some of that bank debt financing and we get calls from the banks often saying, “ Hey, we love this company. We’re tapped out at 10 million for this particular profile. Are you guys interested in doing 10 behind us, 15 behind us?”
Scott: I always love that phone call because it made your life a lot easier, because they were kind of sourcing deals for you, in a way. You have to be a good partner and you have to have a long track record with them for them to want to make that call, but yeah, it’s great. They do have a lot of feet on the street and they see all these companies-
Joel: They see it all. Yeah, they see it all, and it’s great. Whether that’s coming from the bank or whether it’s coming from an investor, a VC, private equity, growth equity player, it’s always great to get those direct calls because you’ve probably worked with them. It’s a partnership approach in terms of building that capital base.
Scott: Yeah. And when you work with a bank, maybe walk people through what kind of documentation you need with the bank, like a subordination agreement or how that works. Because I remember sometimes it was easy, sometimes it was hard. How do people, mostly our startup clients, how do they need to think about that?
Joel: You’re showing your age because it’s gotten easier.
Scott: Has it gotten easier? Yeah.
Joel: Well, because again, if you go back to the conversa… I keep reverting back, but if you think back 10 + years ago, the total overall debt in these businesses was less and if a company’s only taken on 5 million in debt it’s probably not as attractive to parse it out, right? 2.5 to the bank, 2.5 to…
Scott: Yeah. Too much.
Joel: Too many hoops to jump through, too many cooks in the kitchen, too many players. But as the numbers have gotten bigger and the businesses, there’s a broader set of businesses that fit that profile that we’ve talked about. There just is inherently a bigger pool of companies that, again, have taken some bank debt along the way and as maybe the banks exceed their comfort level, and that gets back into that how much enterprise level risk they’re able to take, they’ll do a venture loan, they’ll do an MRR based facility, maybe they’ll have some sort of growth capital facility in there. But it’s rarely going to be skewed 100% towards what we do, which is more enterprise value lending. Right?
Scott: Yeah.
Joel: So, in terms of working together, yeah, and that’s where you ask what’s, or we’ll ask what’s important in terms of terms to think about. That’s where ORIX having done, like I said, over 150 deals or a number of the other lenders in the space who have a long track record, we’ve all worked together. We’ve all worked with SVB and Bridge Bank and Square One. So, I’d say a lot of that inter-creditor and subordination agreement and those sorts of dynamics have been well- tested-
Scott: That’s awesome.
Joel: … And well- played- out. So somewhat of the earlier conversation, I said earlier in terms of maybe 2% of the time, less than 5% of the time I have to have the conversation in terms of why debt. It’s a similar conversation when you’re working with banks these days, or even the companies and the borrowers, to explain to them,” Hey, we have a lot of at-bats, we have a lot of at reps in terms of working with who you’re already working with,” and I think that’s[crosstalk].
Scott: It sounds like you have a template inter-creditor agreement, template subordination agreement that’s already kind of negotiated.
Joel: Yeah, yeah. Most lenders in the space at this stage, if they have any sort of volume, have worked with all the names that we’ve just talked about and have enough reps and at-bats.
Scott: That’s huge because it used to be-
Joel: It’s not a big barrier. It’s not a big barrier anymore.
Scott: It used to just be some brain damage, and the companies would get kind of nervous. So, it’s great that the industry figured it out.
Joel: Yeah. I think the industry’s evolved from that standpoint.
Scott: Yeah. Cool. We’ve got a few more minutes here. What are some terms that you see that are important or that might confuse entrepreneurs or maybe mac or investor [inaudible]? What do you educate the borrowers on?
Joel: Yeah. I’ll answer these two ways, and I’ll maybe start where Kruze is more active and where you spend more time. Because when you go back to that early stage venture lending, again, that bucket that, right or wrong, is a little more skewed or oriented towards the investor syndicate, if you’re a $ 2 million revenue business, if you’re a pre-revenue business, it really is. It’s a bet on the management team, it’s a bet on the traction you have, but a big chunk, this leg of the stool that I didn’t learn at Wells Fargo banking when I did credit 101, it was you lend to a company that has cash flow and collateral. What do most of your businesses not have? Any cash flow. Their collateral walks in and out of the door every day, people. So, I would say things to be cautious of or terms at that early stage, you want the most flexibility, whether that’s no covenants, whether that’s no mac where a lender could call a material adverse change and pull the loan, which, again, is rare. Going back to the folks who plan this ecosystem, that actually happening across the board is very rare. But I’d say at the earlier stage your business is less predictable. A lot of folks have,” I’m going from 2 million in revenue to 10,” in their business plan. Hey, two to four might work out great. Right? So, you don’t want to put a covenant at $ 6 million in revenue when you’re at that stage. So, there’s a tradeoff. In that stage, I’d say you want the most flexibility, you want to pull out as many of those terms, whether it be covenants or macs, as possible, but you’re going to pay up. In that segment of the market, you see both higher interest rates and higher warrant coverage.
Scott: Yeah. The tradeoff, getting[crosstalk].
Joel: There’s a tradeoff. You’re paying up to get that flexibility, right? It’s kind of interesting to think about, but folks, where we play, are willing to, as their business becomes more predictable, 40 million in recurring revenue going to 60, and maybe set a covenant at 50, that’s still… What is it?
Scott: Plenty of room.
Joel: 20, 25% growth even though the borrower may be projecting a 50% growth. As their businesses become more predictable, there’s a tradeoff where they might be okay saying,” Hey, we’re never going to operate the business with less than 5 million in cash,” or,” We’re never going to drop below this recurring revenue level.” Great. There’s a little bit of structure, and as a tradeoff of that structure, I’m likely going to be priced lower across the board than this earlier stage where you’re taking more venture- ish risk.
Scott: For sure. And they’re borrowing more money, so those price differences really matter, because that’s-
Joel: Yeah, yeah, yeah. You start[inaudible] 30, 40, 50 million in debt on some of these late-stage companies. It’s-
Scott: It’s a big interest payment.
Joel: It’s material. Yeah, yeah.
Scott: I love it. This has been really good. I’m so glad you came by. Maybe you can just tell everyone how to find you and how to look up ORIX and maybe your sweet spot on the deal flow.
Joel: Yeah. Well, I’m glad to finally be invited to Scott’s-
Scott: You’re always invited. You’re always invited.
Joel: … Scott’s podcast. So, again, ORIX Growth Capital. My email address, joel.gragg@ orix.com. I’m the Managing Director here, located in the Bay Area so I cover a large chunk of the West Coast with the rest of the team here. But yeah, we plan the growth stage but hopefully, as everyone listening has heard, it’s a very… It really is. I know it sounds kumbaya, but a partner- based ecosystem as you know. So probably more than half the calls that I get, it might not be a fit for us. I’m referring it to other potential partners on the non- bank side, on the bank side, or vice versa. If it’s too large of a check for us, we’re referring out. So, it’s always worth having a call, whether you’re early, you think you’re too early stage or late stage because this is, it’s a big ecosystem but it’s a small ecosystem in terms of the number of players. So, there’s a lot of communication and there’s a lot of partnerships.
Scott: Everybody definitely knows everybody.
Joel: Everybody knows each other.
Scott: Well, on that note, I’ve known Joel for a very long time. You’re awesome to work with, you’re a great guy, and I recommend everyone give you a call. Check out Joel at ORIX. Thank you, man. Thanks for coming by.
Joel: Yeah. Great. Thanks, Scott.
Scott: Thanks for listening to that podcast with Joel Gragg at ORIX. I love doing the venture debt stuff because it’s so inside baseball, and hopefully you as an audience are getting a lot out of that. Before we sign off, a quick shout out to our sponsor, Brex, B- R- E- X. com. Check it out. Credit cards for startups. No personal guarantee. They make it super easy to set up. It’s easy to integrate into QuickBooks. Nice little management console. I think, I always talk about this, but the fact that there’s no personal guarantee for founders is a really big deal. The last thing you want is to have your own personal financial livelihood on the line even more. As a founder, you’re always on the line and you probably put everything you have into your company, but you don’t want to get an ugly surprise if something doesn’t work out. So Brex does not require a personal guarantee. Hope that helps. Check out Brex. Type in Kruze when you go through the sign-up sheet, and you get discounts. We’ll see you next week at Founders and Friends Podcast. Thanks.

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