It was a joy to watch our very own Fatou Diagne participate in the first European Women in VC podcast in 2021!
Fatou was in conversation with the superb Kinga Stanislawska, Managing Partner and co-founder of Experior VC.
There are many points to take away from this conversation, but one we thought to highlight was Kinga’s question of when is the right time to approach venture debt solutions like Bootstrap, and what criteria the team are looking for.
Fatou offered her response:
“What is interesting about venture debt, is that instead of having very firm criteria like a bank would, venture debt is much more open. The question you should ask yourself is why are you taking on venture debt? If you are using it because you can’t raise equity, it’s not the right tool because it’s adding financial risk to your operations. You want to use the debt when your product market fit is already established trying to sell your product, to scale-up that growth – you’re at this inflection point where you have good control over your economics, and you are trying to accelerate it. So treat it like an investment in growth.
If you are borrowing one euro of debt, it is going to generate three euros of revenue, and that three euros is going to turn into 30 euros of equity valuation. That’s what you want to do. You will usually reach this stage once your revenue generation drivers are stable, and you know the levers that you have to take when you want to generate more growth, whether that’s hiring more salespeople, or investing in more marketing. You need to be able to know these levers, then you can inject more fuel and accelerate the whole engine. What the debt helps you do is to move away and play with the timing of your next valuation event.”
You can watch more of the conversation, and further insights from Fatou over at the European Women in VC Youtube channel..
Bootstrap Europe supports thriving industries across the globe, from green energy and genetic testing to SaaS, fintech and smarter city solutions; the team’s collective experience has ensured that the fund includes some of Europe’s fastest, socially-focused scale-up businesses.
To find out more about how Bootstrap Europe helps scale-up businesses, you can visit our website here.
For publications and event organisers looking for comment and participation on venture debt, investment in scale-ups, and the current venture debt/scale-up landscape in the UK and Europe please get in touch at [email protected].
Plus, to hear more about Fatou Diagne and Stephanie Heller’s journey building Bootstrap Europe, and how they have turned this scale-up-centric business into one of Europe’s most promising venture debt funds, we’d love to hear from you.