When a company is achieving product market fit, speed and flexibility should be prioritized, cost optimization a secondary factor and complexity avoided. Only 10% - relatively small percentage - of startups that receive VC funding fail during their first year. During this time, discovery and flexibility are key to being able to find product market fit and proof that an asset can be generated that works for this PMF relationship. The asset must be marketable, useful to customers, competitive, able to fit within regulatory frameworks, etc. If a lending facility is too restrictive at the onset then a company may find themselves struggling to finance the desired asset with the capital available. Or the executive team may end up spending a disproportionate amount of time battling with the capital provider. Neither outcomes are a good use of time or resources in the earliest stages of a company’s life.
