The Case to Finance Your Product Design and Development

As venture capital gets harder to raise, especially for early-stage companies, product financing becomes an even more important option for founders and their startups.

Product financing is a form of venture debt that is specifically focused on facilitating a startup getting a product created when they don’t have the capital to pay for all of the work while it is happening, but it also has other benefits that aren’t immediately obvious that include:

• Increased product velocity — Limited teams can only accomplish so much quickly. Companies that are capital-constrained will likely be team capacity and capability negatively impacting the volume and pace of work on a product. Financing product work help companies get to a commercially viable product sooner, which means getting to product market fit faster and generating revenue/profit faster.
• Raise less capital — Financing product design and development means a company can choose to raise less capital. Raising less capital frees founders to focus on the problem, customers, marketing, sales, etc., and spend less time fundraising. Time and speed are the two most important commodities for founders; having more operational focus helps companies succeed faster.
• Deploy capital differently — Investment monies raised typically have to…