Akhund: Venture debt is dangerous for pre-revenue startups seeking runway
Immad Akhund · Immad Akhund (Mercury) on Fintech, AI and What's Next · Mar 28, 2025 · at 9:35
Immad Akhund, co-founder and CEO of Mercury, explains why pre-revenue companies should not use venture debt merely to extend runway.
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“I think the cases where I don't love it is, you know, you're some AI company that's not making any money today, and you want to, like, go extend your extend your kind of fundraise and runway by, like, 20% or something. I think in those situations, like, when you run out of that, you know, as you start getting into that 20%, or, like, it's, it reduces your options, right? Like, when you have a fundraise, A VC fundraise, and you're in that last 20%, sure, you do layoffs, you kind of reprioritize, you cut your founder's salary, you do whatever the hell it takes to survive but if you have, like, a kind of this fixed burn rate that, like, is caused by venture debt, that's not a healthy position to be inside.”
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