Debt for the predictable, equity for the unpredictable

Our holiday party invitation!

Author

Michael Morgenstern
November 19, 2024

Happy Tuesday Brex community,

Venture debt can be a powerful tool when used correctly. It's ideal for funding inventory—like in hardware companies—or bridging cash flow gaps when you pay suppliers in 30 days but receive customer payments in 72.

But caution is crucial. Using debt to extend runway or fund operations is risky, especially when future funding isn't guaranteed. Debt should accelerate growth where you have proven traction, not support unproven models. Think of it as fuel for a fire that's already burning.

On the upside, venture debt lets you scale without further dilution. If you have positive unit economics and a scalable strategy, it helps you seize opportunities faster. Debt finances a predictable future; equity funds the unpredictable. The more debt you take on, the more confident you must be in your forecasts. Use debt to amplify success, not to delay facing challenges.

Growing together, Michael Morgenstern

  • Brex Supper Club w/ Upfront in SF 11/19
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Jake Kaempf is the founder of Everyday

Everyday is a multi-agent enabled platform that replaces the browser as the primary interface for work. The platform lets users work in any app, url, or file, processes the underlying data automatically, and allows users to assign roles to any LLM to contextualize what's happening across their workflow. Everyday simplifies how people, teams, and agents interface, accelerating productivity.

Ambassadors Perspective: Work will look drastically different in 6, 12, 24 months. While the market has over-indexed on vertical solutions and step-action efficiencies, it has missed on building a better platform. Everyday helps software's largest consumer group interface easily in our multi-agent future. The Everyday platform unlocks a massive new market of human + multi-agent collaboration.

Ryan Broshar and Natty Zola are the General Partners of Matchstick Ventures

Matchstick Ventures is a venture capital firm that invests in early-stage technology startups located between the U.S. coasts. Founded in 2013, Matchstick focuses on pre-seed and seed-stage investments, typically ranging from $500,000 to $1.5 million. The firm emphasizes building strong relationships with founders, offering hands-on support, and fostering a community of entrepreneurs.

General Partners Ryan Broshar and Natty Zola and Head of Network Shannon Shroyer all have deep ties to Techstars, with Ryan and Natty having served as Managing Directors in Minneapolis and Boulder, respectively. The team embodies a #GiveFirst mentality by actively supporting founders and contributing to the startup community. You can follow our community fueled substacks highlighting startup events and news in MN and CO. Matchstick’s mentor network includes over 75 successful entrepreneurs, operators, and corporate partners who provide invaluable guidance and connections to portfolio companies. Matchstick has invested in 100+ companies over 3 funds, such as Branch, soona, Milk Moovement, Inspectorio, Two Boxes and more!

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Don’t hesitate to reach out,🦾!