Q obviously there are more deals that we refer to you than almost anyone else. So, like, how do we, what, what's sort of a more ideal ecosystem for all of this debt? How do you think about, like, SVB versus other banks as a climate company? When do you think about going to different sorts of folks? And say more about the importance of someone who's willing to be flexible.
A I mean, I think a lot of it boils down to aligning the source of capital with the sort of output that it's going to generate, right? So when entrepreneurs are thinking about financing, uncertain outcomes. Right? Uh, developing a new product, um, hiring a new, you know, CTO, whatever it might be. You don't have, like, a guaranteed payment coming in 12 months on the thing you're spending on. That's a great application of equity or grants. Right? And depending on what you're doing, the urgency of it, et cetera, that's gonna change which of those two you pick. Right? When it comes to credit, logical framework is very similar. Right? It's like, how do I align the capital with the outcome that I want? And so, if you are a venture-backed company, you just raised a round in the last six months, you feel relatively confident in, ah, the next round, because you have the traction and metrics and the backers, absolutely go get some venture debt. Like, definitely work with a bank. I mean, the cost of debt from a venture debt bank, Versus a venture debt private fund is sometimes half, and often the warrant coverage is lower. Yes, it will be probably more painful if you mess up, but in terms of capital efficiency, it's, there's like almost no better option, right? Like you, you probably can't find cheaper capital. And, and so I think that as entrepreneurs go out to market and start looking at…
AI assessment note: “I think a lot of it boils down to aligning the source of capital”