According to LAVCA, from 2021 to 2022, equity investments in startups halved, going from 16 trillion dollars to 8 trillion dollars. This demonstrates a reduction in liquidity in the venture capital market, posing a challenge for startups who are They have been forced to look for other financing alternatives.
In contrast, the first quarter of 2023 represented an all-time record in debt startup funding amounts, reaching $1.3 trillion. These figures make evident a new trend for the startup environment; it is more attractive to opt for debt as a source of financing than to receive investments in equity. Entrepreneurs have usually been reluctant to take on debt due to various factors, among others, ignorance of corporate financing and the eventual impact that debt would have on the valuation of the business, added to the fact that cash flow and assets of these companies are usually too early for institutions to dare to grant loans.
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