{"id":7043,"date":"2022-09-13T14:36:45","date_gmt":"2022-09-13T09:06:45","guid":{"rendered":"https:\/\/blog.ruloans.com\/?p=7043"},"modified":"2022-09-13T14:36:45","modified_gmt":"2022-09-13T09:06:45","slug":"the-transition-of-start-ups-from-giving-up-equity-to-raising-debt-in-2022","status":"publish","type":"post","link":"https:\/\/www.ruloans.com\/blog\/the-transition-of-start-ups-from-giving-up-equity-to-raising-debt-in-2022\/","title":{"rendered":"The transition of start-ups from giving up equity to raising debt in 2022"},"content":{"rendered":"\n

India\u2019s start-up ecosystem is budding as more and more businesses are being set up. However, launching and operating a start-up is challenging for founders who dedicate their efforts, savings, time, and energy to growing their business from the ground up. In the initial years, a considerable source of funding is required so that the start-up can grow and become profitable.<\/p>\n\n\n\n

How do founders source this funding?<\/p>\n\n\n\n

In most cases, founders used to give up equity to raise funds for their businesses. However, this meant diluting their ownership and sharing business profits. In recent times, however, start-ups have been making a transition from equity to debt. Have a look \u2013<\/p>\n\n\n\n

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(Source: https:\/\/yourstory.com\/2021\/12\/funding-boom-venture-debt-sweet-spot-early-stage-startups-\/amp<\/a>)<\/p>\n\n\n\n

The reasons for the transition are the drawbacks of issuing equity and the merits of getting loans. Have a look –<\/p>\n\n\n\n

Cons of equity funding –<\/p>\n\n\n\n